The purpose of this paper is to evaluate effectiveness of business incubator process models employed in government-funded incubators operating in the emerging markets countries, using South Africa as an example. This research paper aims to add to literature on the incubator process evaluation stream of studies. Furthermore, it proposes a process effectiveness model based on the integration of organizational diagnosis theory on organizational effectiveness as well the real options theory of the incubator process. This study employs a qualitative study method based on interviews with 10 business incubator managers of the only government sanctioned Small Enterprise Development Agency in South Africa. Data was collected and analysed qualitatively. The researcher proposes an incubator process effectiveness evaluation framework with dimensions that are suitable for an emerging market context.</p / Dissertation (MBA)--University of Pretoria, 2012. / Gordon Institute of Business Science (GIBS) / unrestricted

The purpose of this study is to develop a conceptual model based which examines the influence of various antecedents of the business incubation process. The conceptualized model will be tested empirically using data collected from North American business incubators. The data used are from the National Business Incubator Association's State of the Industry survey. The Partial Least Squares method of analysis is used to explore the identified antecedents, and is used to test validate the model. While a number of resources were identified as components of the incubation process and are considered antecedents of incubator effectiveness (e.g., social networking, access to funding, training, manager/staff intervention), the findings indicate the network of professional services (e.g., legal, marketing, MIS advice) assembled in and around the incubator have the most significant impact on incubator effectiveness. Other resources, such as training, links and management resources, can have an impact, but only insofar as they relate to the professional services resources. The application and screening process were confirmed as essential to find clients that have the proper "fit" within an incubator. The findings indicate that the physical and age characteristics of an incubator are not factors in effectiveness, nor is the networking activities among incubator clients, lending support to a burgeoning class of virtual incubators, accelerators and innovation centers. The results support resource-advantage theory as a foundation theory in the incubation process, and give researchers a basis for future work in this area. The study helps fill gaps in academic research on incubators, and confirms previously theorized work on the process of incubation. In practice, incubator managers and stakeholders can use these results to assemble the particular resources they need for their type of incubator, and more effectively select potential clients based on those resources. This should allow a smoother, more even flow through the incubator, a better use of scarce and valuable resources, and likely higher graduation rates. This study is the first empirical analysis of the incubation process to arrive at a statistically-validated model of business incubation.