Helping young entrepreneurs succeed: The case for business incubation services

Entrepreneurship isn’t a one-size-fits-all endeavor. Successful entrepreneurs don’t merely rely on a singular skill—they thrive by blending a combination of abilities and resources. There’s an array of needs that fuels their journey:

Soft Skills: The Art of Connection. Soft skills are personal attributes that directly relate to how well someone can work with others. Soft skills are interpersonal and behavioral skills that help individuals succeed and develop at work. Entrepreneurial soft skills may include:

• Communication: The ability to articulate vision, negotiate, and inspire.
• Time Management: Juggling tasks, deadlines, and priorities with finesse.
• Problem Solving: Navigating obstacles, turning challenges into opportunities.
• Leadership: Guiding teams toward shared goals.

Hard Skills: The Blueprint for Success. Hard skills refer to specific, quantifiable abilities and knowledge that can be taught, measured, and objectively evaluated. These skills are often technical or task-oriented, enabling individuals to perform specific functions or tasks in their roles. Entrepreneurs need to master hard skills to form the bedrock of their ventures:

• Business Management: Crafting strategies, optimizing operations.
• Budgeting: Balancing the financial ledger, making every dollar count.
• Branding: Creating an indelible mark in a crowded marketplace.
• Marketing: Spreading their story far and wide.

The Nexus of Support: Mentors and Networks. An entrepreneur’s ascent is never solitary. They thrive within a web of connections:

• Mentors: Wise guides who illuminate the path, share hard-won wisdom.
• Networks: Vibrant ecosystems where ideas collide, partnerships ignite.
• Access: To knowledge, opportunities, and the pulse of industry trends.

Igniting Entrepreneurial Success: The Startup Phase. The startup phase—a critical stage where a business idea takes shape—requires various supports:

• Skills Expansion: Entrepreneurs voraciously acquire fresh competencies.
• Network Growth: Cultivating relationships that magnify their influence.
• Funding: One of the core elements that breathes life into their vision.

IYF recognizes the importance of supporting entrepreneurs across all these areas and of collaborating with local partners to ensure that support is contextualized, effective and timely. One of our initiatives under the Kefeta Project in Ethiopia, is lending technical assistance to local partners to support entrepreneurship through capacity building while creating linkages needed for entrepreneurs to grow their network, access markets, and obtain capital. Recently, we partnered with NICE Incubation and Innovation Center (NICE) and the Entrepreneurship Development Institute (EDI), to provide targeted support to 85 Ethiopian young people.  

IYF’s partnership with NICE served to support aspiring and early-stage entrepreneurs to either create 
new businesses or transform and grow existing businesses. These services encompassed soft and hard skills training, connections to professional networks, support for business registration, and linkages to finance in the form of grants and loans. The project was prescriptive about limiting the number of participants and working with youth that were interested in or had new and innovative businesses in the areas of digital technology, textiles, leather manufacturing, and agri-business – as these are local growth sectors.

Incubation services take time and so the project solicited a six-month long comprehensive package of support services for identified youth. The work also considered gender balance and inclusivity, being intentional about reaching young women and persons with disabilities. Incubation services were intended to enable young entrepreneurs to initiate creative and innovative businesses or further develop business activities, extend businesses by starting new ventures, improve business intelligence, and improve communication with its customer base in less time. In the end, the incubation program empowered young entrepreneurs by providing comprehensive support along three key components:

1. Entrepreneurship Training and 3D Technology Access: Kefeta equipped participants with  entrepreneurship training, including pitching skills. Additionally, participants gained access to cutting-edge 3D technology for prototype development and testing.
2. Pre-Incubation Support: The program provided valuable advice on business diagnosis and strategic planning. Services covered business formalization, legalization, and personalized business plan recommendations and feedback.
3. Post-Incubation Assistance: Following incubation, participant support continued. Whether in group settings or one-on-one interactions, the focus was on addressing specific gaps in business development.

The program aimed to elevate Ethiopia’s youth, fostering innovation and sustainable growth in their entrepreneurial endeavors. A total of 65 start-ups participated in the post-incubation support. Twenty start-ups have successfully completed their legalization process, while 27 others are currently finalizing the legal requirements to launch their businesses at full scale. Additionally, the incubation services facilitated valuable networking opportunities for nine entrepreneurs. Below are examples of the support rendered:

1. TVET Collaboration: Five entrepreneurs established linkages with Technical and Vocational Education and Training (TVET) institutions. Through these connections, they accessed raw materials and equipment necessary for producing commercialized products based on previously tested prototypes.
2. Digital Ventures: One entrepreneur connected with Ethio-telecom, granting access to servers for their digital app venture.
3. Entrepreneurship in Entertainment Industry: An entrepreneur was linked with ETV media and its producers. This collaboration helped kickstart the young entrepreneur’s production and broadcasting business.
4. Local Authority Support: Two entrepreneurs established connections with local authorities, enabling them to secure suitable working spaces for their ventures.

Additionally, entrepreneurs within the program were encouraged to share their experiences and insights with one another, fostering a collaborative and supportive environment. Finally, the project worked with its Youth Empowerment Fund to award a handful of registered businesses seed capital in the form of grants. These grants provided essential financial support, enabling the registered businesses to further their innovative ventures. In conclusion, incubation services play a pivotal role in nurturing and propelling entrepreneurial dreams, fostering innovation, and shaping the future of business ventures.

Elizabeth Salazar is IYF’s Senior Technical Advisor for Economic Opportunities.
Shambel Worku is IYF’s Entrepreneurship Technical Advisor.