Transforming innovations into enterprises through agri- business incubators: a process analysis

Abstract

The present study titled “Transforming innovations into enterprises through agri business incubators – A process analysis” was conducted in two states – Kerala and Tamil Nadu. The selected agri-business incubators in these two states are attached to the State Agricultural Universities and Research Institutes under ICAR. Two Agribusiness incubators each from Kerala and Tamil Nadu has been selected purposively for this study. From Kerala, Agri-Business Incubator (ABI) of Kerala Agricultural University (KAU) at Thrissur and Technology Incubation Centre (TIC) of Central Tuber Crop Research Institute (CTCRI) at Thiruvananthapuram under ICAR has been selected. From Tamil Nadu, the Madurai Agri Business Incubation Forum (MABIF) of National Bank for Agriculture and Rural Development (NABARD) at Madurai under TNAU and Agribusiness Incubator (ABI) of ICAR Sugarcane Breeding Institute (SBI) at Coimbatore under ICAR has been selected for the study. Thus a total of four ABIs one each under the SAU and ICAR has been selected for the study from each state. The objectives of the research were comparison of the nature and extent of innovation based agri-business incubation undertaken by the Agri-business Incubators (ABIs) in Kerala and Tamil Nadu; analysis of the entrepreneurial effectiveness of ABI incubatee and non- incubatee agripreneurs; delineation of the factors contributing to the capacity building of the ABI incubatee agripreneurs and formulation of extension strategies based on the constraints identified, to improve the performance of ABIs. From each of the selected incubators, fifteen ABI incubatee entrepreneurs and five officials was selected. Fifteen non-incubatee agripreneurs each were selected randomly from the respective districts where the incubators were located. Thus, a total of 120 agripreneurs and 20 officials adding up to a total of 140 respondents from the two states constituted the sample for the study. The independent variables in the study selected through judges rating were age, education, agripreneurial income, reason for starting the enterprise, type of ownership, source of capital, market information seeking behaviour, opportunism, pro-activeness, networking, marketing strategies and innovativeness. The dependent variable entrepreneurial effectiveness of the agripreneurs was measured using the scale developed by Somanath (2009), with suitable modifications. The number of enterprises established after incubation and their survival rate was collected from the ABIs and it was found that in Kerala, the agro-enterprises has a survival percentage of 94.12, whereas in Tamil Nadu, the agro-enterprises has a survival percentage of 90.52. The nature of innovations undertaken by the agripreneurs were classified under the broad areas as production, processing/value addition, packaging, marketing and distribution, agricultural consultancy, agricultural services and combination of any. Majority of the 256 incubatees in Kerala (80.60) and Tamil Nadu (41.25) were found to undertake innovative agri business enterprises related to processing/value addition. From the analysis of of the entrepreneurial effectiveness of agripreneurs in Kerala and Tamil Nadu using Z-test, it was found that there exists no significant difference in the entrepreneurial effectiveness scores of incubatees and non-incubatees of Kerala but there exists significant difference between the entrepreneurial effectiveness scores of incubatees and non incubatees of Tamil Nadu (0.05% level of significance). It was observed that in state-wise and category-wise comparison, there is no significant difference in the entrepreneurial effectiveness scores of the agripreneurs of Kerala and Tamil Nadu. From the analysis of Pearson’s coefficient of correlation ‘r’ for the relationship between the socio-personal variables and entrepreneurial effectiveness of the agripreneurs, it was found that among the incubatees of Kerala, age and agripreneurial income had no significant correlation with the entrepreneurial effectiveness whereas education of the agripreneurs had highly significant correlation with the entrepreneurial effectiveness at 0.001% level of significance. It was further observed that among the non-incubatees of Kerala, age exhibited no correlation with the entrepreneurial effectiveness whereas education and agripreneurial income were significantly correlated with the entrepreneurial effectiveness at 0.05% level of significance. In case of incubatees of Tamil Nadu, age showed no correlation with the entrepreneurial effectiveness whereas education and agripreneurial income had a significant bearing on the entrepreneurial effectiveness, at 0.01% level of significance. It was found that for the non-incubatees of Tamil Nadu, age and agripreneurial income had significant correlation with the entrepreneurial effectiveness at 0.01% and the relationship with education was significant at 0.05% level of significance. On performing the Chi-square test for the relationship between the qualitative socio personal variables and entrepreneurial effectiveness of the agripreneurs, it was found that among the incubatees of Kerala, all the variables i.e., reason for starting the enterprise, type of ownership and source of capital did not show correlation with the entrepreneurial effectiveness with p-values 0.690, 0.586, 0.801 respectively. It was further observed that for the non incubatees of Kerala also, all the variables i.e., reason for starting the enterprise, type of ownership and source of capital were not significantly correlated with the entrepreneurial effectiveness with p-values 0.896, 0.564, 0.862 respectively. It was found that among the incubatees of Tamil Nadu, reason for starting the enterprise was significantly correlated with entrepreneurial effectiveness at 0.05% level of significance with p-value 0.433, whereas type of ownership and source of capital were not correlated with the entrepreneurial effectiveness with p-values 0.762 and 0.839 respectively. In case of non-incubatees of Tamil Nadu, reason for starting the enterprise and source of capital were significant at 0.05% level of significance 257 with p-values 0.308 and 0.455 respectively and type of ownership was not significantly correlated with entrepreneurial effectiveness with p-value 0.621. From the analysis of Pearson’s coefficient of correlation ‘r’ for the relationship between the entrepreneurial variables and entrepreneurial effectiveness of the agripreneurs, it was found that among the incubatees of Kerala, all the six variables were significant at 0.001% level of significance. While for the non-incubatees of Kerala, networking and market information seeking behaviour were significant at 0.01% level of significance and the other four variables were significant at 0.001% level of significance. It was observed that for the incubatees of Tamil Nadu, networking and innovativeness were significant at 0.01% level of significance and the other four variables were significant at 0.001% level of significance. In case of non incubatees of Tamil Nadu, only networking was significant at 0.01% level of significance and the other five variables were significant at 0.001% level of significance. On performing the Principal Component Analysis for the influence of the sub dimensions on the entrepreneurial effectiveness scores of the agripreneurs, it was found that the first principal component accounts to the largest percentage variance (69.98%) in the entrepreneurial effectiveness scores of the agripreneurs in Kerala and the first five principal components accounts for a cumulative variance of 97 per cent. It was also revealed that it is the risk management effectiveness and production management effectiveness were largely influencing the entrepreneurial effectiveness of the agripreneurs in Kerala. Whereas in Tamil Nadu, it was found that the first principal component accounts to the largest percentage variance (69.63%) and the first five principal components accounts for a cumulative variance of more than 97 per cent. It was also revealed that it is the risk management effectiveness and time management effectiveness were largely influencing the entrepreneurial effectiveness of the agripreneurs in Tamil Nadu.Comparative analysis of the PCA-biplots revealed that majority of the agripreneurs in Kerala (50%) were having a little higher effectiveness compared to 49% of agripreneurs in Tamil Nadu giving similar results. The results revealed that 71.67 per cent of incubatees belong to middle age category, 86.67 per cent of non-incubatees possessed graduate level of education, 55 per cent of incubatees received income between Rs.100001 to Rs. 500000, 33.33 percent of non incubatees had securing self-employment as their reason for starting the enterprise, 60 per cent of non-incubatees possessed individual proprietorship type of ownership, 98.33 per cent pf incubatees possessed personal capital as their source of capital, 61.67 per cent of non incubatees exhibited medium level of market information seeking behaviour, 63.33 per cent of incubatees possessed medium level of opportunism, 60 per cent of non-incubatees exhibited medium level of pro-activeness, 68.33 per cent of incubatees possessed medium level of networking, 73.33 per cent of incubatees having medium level of marketing strategies and 73.33 per cent of incubatees possessed medium level of innovativeness. 258 Results of the t-test for the process analysis indicated that product development, capacity building and market linkage were found to be significant with p-values 0.003. 0.015, 0.0004 respectively, whereas networking, mentoring, technology utilization, finance facilitation and follow-up were found to be non-significant with p-values 0.159, 0.477, 0.552, 0.459, 0.334 respectively. The Strengths, Weaknesses, Opportunities and Challenges (SWOC) of KAU-ABI include product development and refinement, less publicity among public about incubation facilities, food analysis and quality control laboratory inside the incubator and shortage of separate fund for Research and Development (R&D). While the SWOC of TIC-CTCRI include tuber crops are more focused for increasing the value, enrolment of incubatees is less, scope for tuber crops exploitation and product diversification and lack of infrastructure. The SWOC of NABARD-MABIF include various schemes including Intellectual Property Facilitation Centre (IPFC), Cluster Based Business Organizations (CBBOs), Catalytic Capital Fund (CCF), huge cost of modern technologies, in-house production centre, breakdown cost is more. The SWOC of SBI-ABI include sugarcane based novel and commercialized products, non availability of dedicated labs and facilities, incubation and technology promotion, low manpower. The major suggestions for improving the performance of ABIs in Kerala include increasing incubation office facility with increased manpower and provision for seed funds to the incubatees. While the suggestions for ABIs in Tamil Nadu include providing national and international networking and collaboration for increasing export opportunities and conducting meet-ups between sector-specific incubator and incubatee meet-ups through 'networks of incubators' for sharing resources best practices and for generating new ideas. The major entrepreneurial constraint perceived by the incubatees of Kerala and Tamil Nadu was lack of skilled labour availability (90%) and raw material price hike (90%) respectively. Whereas for the non-incubatees of Kerala and Tamil Nadu, the major constraint was raw material availability (86.67%) and uneven price hike of raw material (80%) respectively. The major suggestion for improving the effectiveness of agripreneurs of Kerala include the establishment of facilities such as the labour banks at the Panchayat level which would serve to ensure the timely availability of labour for the various agricultural activities. In case of the agripreneurs of Tamil Nadu, the Government support is called for to regularize the cost of inputs and ensure the quality of inputs supplied by the dealers. The general suggestions for the agripreneurs in both the states include diversification in their agri-business activities to buffer the losses they may incur in case of the seasonal fluctuations in the demand for the regular produce which in turn results in the fluctuation in their market prices