Increasing Small and Medium Businesses Economic Contributions In Tanzania; Business Incubation Perspective.

Abstract

Small and medium businesses (SMBs) are known worldwide for their contribution in economic development, creation of employment, poverty alleviation and income generation. However, SMBs especially in Tanzania and other sub-Saharan Africa countries face many challenges hindering them to grow and contribute to the economy. This study aims at proposing a systematic approach to incorporating business incubators for supporting SMBs activities through the incubation programs. Data collection was conducted through an in-depth interviews with the incubation expert staff of the Small Industries Development Organization (SIDO) business incubator together with selected owners of SMBs and from a guided questionnaire to 150 SMBs owners in Dar es Salaam, Morogoro, and Dodoma regions respectively. The content analysis of data was done to obtain the main themes included in a guided questionnaire and using Statistical Package for Social Sciences (SPSS) descriptive analysis. The results of this study show that initial capital and financial support to run the businesses are major challenges facing the SMBs. Other challenges include goods from China, United Kingdom and the influx of foreign companies are contributing as challenging factors for development of SMBs in Tanzania. One strange challenge emerged in the study is the belief in witchcraft practices. The conceptual framework suggested highlights on how SMBs on graduating from incubators apart from providing employment have a chance to contribute positively to the national economy through taxes, attracting international business and bring foreign money to Tanzania. The study recommends that SMBs owners should aim doing international business to attract investors and share experience and establishment of different types of incubators in Tanzania.