1. Introduction
This is my 50th article for Economia & Mercado magazine and the Diário Económico newspaper. It addresses the growing popularity of Business and Enterprise Incubators in Mozambique, particularly within Public Administration¹, banks, microcredit institutions, and universities. Recognising this trend, Mozambique’s Government Five-Year Programme for 2025–2029 includes the creation of seven additional incubators by 2029, focusing on innovative projects in value chains.
In this article, I share my experience on the topic and challenge my readers to answer the following question: What are Business and Enterprise Incubators (BEIs), and why do they fail in Africa?
2. What is a Business and Enterprise Incubator?
In my view, a BEI is characterised by the combination of the following elements:
- Mechanisms to stimulate and protect economic recovery and development: Historically, BEIs were created to address challenges in economically and socially depressed regions.
- Support mechanisms for entrepreneurs to create their businesses: Depending on specific goals, BEIs can take different forms, the most common being:
- Hybrid (virtual/physical)
- Thematic or cross-cutting
- Technology-based
- Focused on social impact
- A special focus on vulnerable groups in Africa (e.g., women² ³, youth, people with disabilities, war-displaced populations).
- Support for businesses at early stages of their lifecycle, such as:
- Conception
- Startup
- Scaling
- Entrepreneurs looking for affordable setups, requiring:
- Low initial fixed capital investment
- Low operating costs
- Quick installation and business start-up
- Accommodation solutions, combining:
- Infrastructure
- Support services
- Infrastructure: BEIs are usually housed in repurposed facilities, contributing to real estate and architectural revitalisation in underdeveloped urban or peri-urban zones. Ideally, they’re located within university campuses⁵, industrial parks, or technology hubs.
- Physical spaces are equipped with:
- Power, telecommunications, internet
- Shared workspaces, meeting rooms
- Office furniture, IT equipment, laboratories, auditoriums, green areas, parking, etc.
- Infrastructure scaled for small teams⁶ ⁷
- Support services most sought by entrepreneurs include:
- Training, mentoring, consulting, and coaching
- Access to funding
- Access to markets
- Access to technology
- Networking and high-value partnerships, both internal (with other incubated businesses) and external (regional entrepreneurial ecosystems)
3. Why Do Business and Enterprise Incubators Fail?
Despite increasing demand for incubation services, BEIs often fail to meet expectations — revealing gaps in the incubation market. The most significant issues, as identified by African entrepreneurs, are:
- Lack of funding mechanisms for business scaling (70%)
- Difficulties accessing and identifying markets (50%)
- Lack of access to qualified mentors (25%)
4. The Role of Governments in Supporting BEIs
These market failures are often addressed through direct government intervention, typically in the form of:
- Entrepreneurship training: To build the necessary skills to create and manage successful businesses.
- Mentorship programmes: Connecting young entrepreneurs with business leaders and experienced mentors.
- Business consultancy services: Including financial planning, market research, and business strategy development.
- Market access programmes: Facilitating access to local and international markets, trade missions, and marketing campaigns.
- Networking support: Connecting entrepreneurs, investors, and other key players.
- Seed funding: Government support for BEIs in the form of grants, loans, subsidies, or loan guarantees.
5. The Biggest Challenge: Financial Self-Sustainability
Financial self-sustainability is the greatest challenge faced by BEIs in Africa. To overcome this, BEIs are turning to diverse revenue streams, such as:
- Training services: Offering specialised courses for entrepreneurs/businesses not housed in the incubator.
- Business consultancy: Services for external entrepreneurs or businesses.
- Space rentals: Renting equipment, auditoriums, labs, etc., to non-incubated users.
- Events: Hosting thematic events to generate revenue and enhance visibility.
- Product commercialisation: Co-developing and selling products with entrepreneurs (e.g., Loja do Empreendedor/a in Pemba).
- Grants and funds: Seeking external funding for project and programme development.
6. Conclusion
This article has explored the importance of Business and Enterprise Incubators (BEIs) in Africa, highlighting their role in promoting economic and social development, especially in deprived regions.
A BEI stands out by supporting entrepreneurs in the early stages of their business lifecycle — from conception to scale-up — offering not only low-cost infrastructure, but also vital support services such as training, mentoring, market access, and strategic networking.
The main reasons for BEI failure in Africa stem from their inability to meet entrepreneurs’ real needs.
The issue of financial self-sustainability remains the biggest challenge. Dependency on external funding without developing sustainable revenue sources threatens the long-term viability of these structures. A diversified business model is therefore essential.
African governments have a critical role in overcoming these limitations, by offering structured support to BEIs through funding, training, consultancy, and by easing access to domestic and international markets. When aligned with public-private partnerships, these efforts can foster robust and sustainable entrepreneurial ecosystems.
In Africa, BEIs are more than physical spaces — they are platforms for economic and social transformation, with the potential to drive job creation and strengthen the resilience of vulnerable communities. Believing in incubators means believing in Africa’s potential to innovate, create, and thrive.
¹ INEP; INCM; INEGI
² Over 60% of startups incubated in Africa are led by women (AfDB).
³ In 2020, the number of women entrepreneurs in Africa grew by 21%, driven by gender-focused incubator initiatives (WEF, 2021).
⁴ In 2019, most startup investments in Africa occurred at early (54%) or growth (33%) stages (Partech Ventures).
⁵ About 70% of African business incubators partner with universities, compared to 80% in Brazil (VC4A).
⁶ A 2020 study by the Institute of Social and Economic Studies in Mozambique showed incubated businesses created an average of five jobs each.
⁷ A 2018 report by the African Development Bank showed incubated businesses created an average of three jobs each, compared to 2.2 jobs in Brazil.
