Exploring the establishment of a business incubator in St. Lucia (Caribbean): New Zealand-based incubated firms providing lessons for St. Lucia

Abstract

The purpose of this research is to study the incubation system in New Zealand, with a view to determining the suitability of a business incubator for St. Lucia, a small-island developing state (SIDS), in the Caribbean. St. Lucia's economy is based mainly on tourism and agriculture. It discusses the concept of a business incubator and the international best practices. The focus is on the efficacy of a business incubator as an economic development tool, and its impact on poverty alleviation. The research analyses the perceptions of owners of incubated firms in New Zealand with respect to the benefits and setbacks of the incubation system in New Zealand. The issues of job creation, funding, and management of the business incubator are discussed as well. A holistic theoretical approach was adopted in this study. It is expected that cultural attitudes and the socio-economic environment play integral roles in the policy that governs any incubation system. Both a qualitative and quantitative research study was employed to explore whether the New Zealand-style business incubators would provide a worthwhile model for St. Lucia. The findings of the field research reveal that a business incubator does offer advantages to start-up entrepreneurs that they would not obtain if they were operating without such support. These include lower start-up costs due to rental rates that are below commercial rental rates, opportunities to network with the other companies that they have to share space with, and being accountable to a third party for meeting targets for the business. It further unveils that the tangible benefits occur over the long-term. Finally, the study demonstrates that an incubator would benefit a developing country; however it has to be adapted to specific needs of the island. Who (government or civil society) would be responsible for managing it, the source of funding (to set up the facility, purchase necessary equipment, etc.), the ideal location, and the type(s) of enterprises that would be most beneficial to St. Lucia are addressed.