Project – Business Incubation Services and the Growth of Technology Start-ups: A Study of Start-ups at the Lagos Innovation Hub

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Business start-ups have become increasingly important to economic development because they provide mechanisms for commercialising ideas, introducing new products and services, creating employment and stimulating innovation. However, new ventures frequently face resource constraints, uncertain markets, limited managerial experience and difficulties in accessing finance, technology and business networks. These challenges are particularly significant for technology start-ups because they often operate in rapidly changing markets where product development, customer validation, technical expertise and access to investment are essential. Business incubation has consequently emerged as an entrepreneurial support mechanism designed to help young firms overcome some of these early-stage constraints. Hackett and Dilts (2004) describe business incubation as a process through which organisations accelerate the development of entrepreneurial ventures by providing them with targeted resources and assistance. More recent evidence continues to show that incubation is associated with venture performance, although the magnitude of the relationship varies across contexts and types of support provided (Seitz et al., 2026).

Business incubation services generally involve a combination of physical, financial, managerial, technical and networking support intended to improve the capacity of new ventures. Such services may include workspace, business advisory services, mentoring, training, access to finance, technical assistance, networking opportunities and assistance with market development. Bergek and Norrman (2008) explain that incubators can provide infrastructure, business support and access to networks that help entrepreneurs develop their ventures. Similarly, Al-Mubaraki and Busler (2011) identify infrastructure, business support and networking as important elements of incubation programmes. A review by Al-Mubaraki and Busler (2015) further indicates that incubation programmes can influence outcomes such as firm survival, sales growth, profitability, employment, networking and innovation. Thus, incubation services are not limited to providing office space; rather, they represent a broader support system intended to address multiple constraints encountered by emerging businesses.

The relevance of business incubation is particularly strong for technology start-ups because technology entrepreneurs often require specialised forms of assistance beyond conventional business support. Technology ventures may need access to technical infrastructure, product-development expertise, specialised mentors, investors, research institutions, markets and other technology entrepreneurs. Xiao and North (2017), examining technology business incubators, found that services such as funding, technical support and entrepreneurial mentoring can influence the early growth and graduation performance of new technology-based firms, although the effects can vary according to the local context. Similarly, network-based incubation research indicates that access to external networks can support start-ups by improving knowledge flows, business relationships and access to resources (Hausberg & Korreck, 2020). These observations suggest that technology start-ups may benefit from incubation not merely because of physical facilities but because incubators can connect entrepreneurs with knowledge, expertise, markets and other resources that may otherwise be difficult to obtain.

The growth of a technology start-up can be assessed through several dimensions, including revenue growth, customer growth, market expansion, employment creation, innovation, investment acquisition and business survival. Ayatse, Kwahar, and Iyortsuun (2017) explain that business incubation research commonly examines firm performance through indicators such as revenue, finance, venture capital, survival, networking, innovation, organisational growth, job creation, sales growth, profitability and technological development. Their Nigerian study found that business assistance intensity and professional management services were significant predictors of firm performance, while some other incubation-process dimensions were not significant predictors. This evidence is important because it indicates that the existence of an incubation programme alone may not guarantee start-up growth; rather, the specific services delivered and the manner in which entrepreneurs receive them can influence outcomes. The quality, intensity and relevance of incubation support therefore require empirical examination.

Evidence from Lagos also demonstrates the relevance of incubation to entrepreneurial development. Sanusi and Akinnifesi (2023), in a study of small businesses in Lagos State, examined technological, physical and virtual business incubation in relation to entrepreneurial success. Their study surveyed 368 small-business owners and obtained 262 usable responses, reporting significant relationships between technological business incubation, physical business incubation, virtual business incubation and entrepreneurial success. Although the study focused on small businesses in Lagos Island rather than technology start-ups in an innovation-hub setting, it provides locally relevant evidence that incubation mechanisms can be associated with entrepreneurial outcomes. This makes it important to investigate whether similar relationships exist among technology start-ups operating within a dedicated innovation ecosystem.

The Lagos technology ecosystem provides an important context for studying business incubation because the city has developed multiple programmes and institutions designed to support technology entrepreneurs. The Lagos State Employment Trust Fund’s Lagos Innovates initiative, for example, describes its mandate as supporting technology and innovation-driven start-ups from early-stage development through scaling and provides workspaces and infrastructure, learning and capacity building, early-stage incubation, ecosystem exposure and peer networks. Its Idea Hub Programme specifically provides a 12-week incubation programme for early-stage technology-enabled ventures, including business incubation, coaching and access to networks involving government institutions, corporations, start-ups and investors. Similarly, the University of Lagos Innovation Hub provides incubation and other technology-oriented programmes and is located within the Akoka-Yaba technology environment. These initiatives illustrate the increasing institutionalisation of entrepreneurial support within Lagos’s technology ecosystem.

The specific focus on start-ups at the Lagos Innovation Hub is therefore important because incubation programmes can differ considerably in the type, intensity and accessibility of services they provide. Evidence from the international literature does not establish that all incubators produce identical outcomes. Lukeš, Longo, and Zouhar (2019), using data from 2,544 innovative Italian start-ups, found that incubator tenancy had different short- and long-term effects on sales revenue and no significant effect on job creation, demonstrating that incubation outcomes can vary across performance dimensions and over time. More recent meta-analytic evidence involving 22 empirical studies and 65 effect sizes found an overall positive relationship between incubator participation and new-venture performance, while also identifying differences according to incubator type, sponsorship, programme design, support focus and regional context (Seitz et al., 2026). Therefore, the effectiveness of incubation cannot simply be assumed from the existence of an incubator. It is necessary to examine the particular services available to start-ups and determine how these services relate to their growth within the Lagos innovation environment.

1.2 Statement of the Problem

Technology start-ups are expected to transform innovative ideas into commercially viable products and services, yet many young ventures encounter significant constraints during their early stages. Limited access to finance, managerial expertise, technical resources, market information, business networks and experienced mentors can restrict their ability to develop and scale. Business incubation is intended to address some of these constraints through structured support, but evidence indicates that the impact of incubation can vary according to the services provided and the context in which the incubator operates. Ayatse et al. (2017), for example, found in Nigeria that business assistance intensity and professional management services significantly predicted firm performance, whereas other dimensions of the incubation process were not significant. The problem, therefore, is not merely whether start-ups have access to incubation, but whether the services they receive are sufficiently relevant and effective to support measurable business growth.

A second problem concerns the adequacy of specific incubation services available to technology start-ups. Technology entrepreneurs may require different combinations of financial assistance, technical support, mentoring, training, workspace, market access and networking depending on the developmental stage of their ventures. Xiao and North (2017) found that funding, technical support and entrepreneurial mentoring could influence the growth and graduation performance of technology-based firms, but the effects differed according to context. Similarly, Hausberg and Korreck (2020) emphasise the role of network-based incubation in facilitating access to external knowledge and resources. If particular services are unavailable, insufficient or poorly matched to the needs of start-ups, entrepreneurs may remain unable to convert incubation opportunities into sustained business growth. This creates a need to investigate the specific incubation services accessed by start-ups at the Lagos Innovation Hub and their relationship with growth.

A third problem is the limited empirical evidence specifically connecting incubation services with the growth of technology start-ups within Lagos innovation hubs. Nigerian research has examined business incubation and firm performance generally, including evidence from Lagos State, but there remains a need for studies focused specifically on technology start-ups operating within innovation-hub environments. Sanusi and Akinnifesi (2023) reported significant relationships between different forms of business incubation and entrepreneurial success among small businesses in Lagos Island, while Ayatse et al. (2017) examined business incubation and firm performance in Nigeria more broadly. These studies provide useful evidence but do not directly establish how the particular services experienced by technology start-ups within a Lagos innovation hub relate to dimensions of start-up growth. The contextual gap therefore provides justification for the present study.

A further problem arises from the fact that incubation may produce different outcomes depending on the type of growth being considered and the characteristics of the incubation programme. Lukeš et al. (2019) found that incubation could have a negative short-term relationship with sales revenue but a positive long-term effect on sales-revenue growth, while the effect on employment was not significant. More recent meta-analysis similarly found that incubation participation has a positive overall association with venture performance but that effects vary across financial, operational and strategic outcomes and according to programme characteristics (Seitz et al., 2026). Consequently, it would be inappropriate to assume that participation in the Lagos Innovation Hub automatically produces growth for every start-up. There is a need for empirical evidence showing whether business incubation services are significantly related to the growth of technology start-ups at the Lagos Innovation Hub. This study addresses that problem by examining selected incubation services and their relationship with start-up growth.

1.3 Purpose of the Study

The general purpose of this study is to examine business incubation services and the growth of technology start-ups, with particular reference to start-ups at the Lagos Innovation Hub.

The specific objectives are to:

1. examine the relationship between mentoring and coaching services and the growth of technology start-ups at the Lagos Innovation Hub;
2. determine the relationship between business training and capacity-building services and the growth of technology start-ups at the Lagos Innovation Hub;
3. examine the relationship between access to funding and financial support services and the growth of technology start-ups at the Lagos Innovation Hub; and
4. determine the relationship between networking and market-access services and the growth of technology start-ups at the Lagos Innovation Hub.

1.4 Research Questions

The following research questions will guide the study:

1. What is the relationship between mentoring and coaching services and the growth of technology start-ups at the Lagos Innovation Hub?
2. What is the relationship between business training and capacity-building services and the growth of technology start-ups at the Lagos Innovation Hub?
3. What is the relationship between access to funding and financial support services and the growth of technology start-ups at the Lagos Innovation Hub?
4. What is the relationship between networking and market-access services and the growth of technology start-ups at the Lagos Innovation Hub?

1.5 Research Hypothesis

The following null hypothesis will be tested at the 0.05 level of significance:

H₀: There is no significant relationship between business incubation services and the growth of technology start-ups at the Lagos Innovation Hub.

1.6 Significance of the Study

The study will be significant to technology start-up founders and entrepreneurs because it will provide empirical information about the incubation services that are associated with start-up growth. Entrepreneurs may use the findings to better understand the potential value of mentoring, training, financial assistance, networking and market-access opportunities within an incubation environment.

The study will be useful to management of the Lagos Innovation Hub because it may provide evidence for assessing the effectiveness of its support mechanisms. Since incubation programmes involve different services and resource commitments, empirical evidence concerning their relationship with start-up growth may assist hub managers in improving programme design, service delivery and support mechanisms.

The study will also be significant to government agencies and policymakers involved in entrepreneurship, technology development and economic development in Lagos State and Nigeria. The Lagos Innovates programme demonstrates the government’s increasing emphasis on supporting technology and innovation-driven ventures through incubation, infrastructure, learning, networking and ecosystem exposure. Findings from this study may provide additional evidence that can inform the design and evaluation of public entrepreneurial-support programmes.

The study will contribute to academic knowledge in entrepreneurship, business incubation, innovation management and technology-based enterprise development. Existing Nigerian research has established relationships between incubation processes and firm performance, but the present study focuses specifically on technology start-ups within a Lagos innovation-hub setting. Ayatse et al. (2017) identified business assistance intensity and professional management services as significant predictors of firm performance in Nigeria, thereby providing a foundation for further context-specific research.

Finally, the study will be useful to future researchers investigating business incubation, accelerators, innovation hubs, start-up growth and entrepreneurial ecosystems. It may provide a basis for comparative research involving other Nigerian innovation hubs, technology clusters, incubators and accelerator programmes. It may also support studies comparing incubated and non-incubated start-ups across different sectors and locations.

1.7 Scope of the Study

The study is titled “Business Incubation Services and the Growth of Technology Start-ups: A Study of Start-ups at the Lagos Innovation Hub.”

The geographical scope of the study is limited to the Lagos Innovation Hub and the technology start-ups associated with the hub.

The content scope covers two principal variables: business incubation services and technology start-up growth. Business incubation services will be examined through four dimensions: mentoring and coaching, business training and capacity building, funding and financial support, and networking and market access.

The dependent variable, technology start-up growth, will be examined using indicators such as customer growth, revenue growth, market expansion, employment growth, product development and overall business development.

The population scope will consist of founders, owners, managers and relevant employees of selected technology start-ups participating in or having participated in incubation activities at the Lagos Innovation Hub.

1.8 Operational Definition of Terms

Business Incubation: A structured process through which an organisation provides selected support services and resources to new or emerging businesses to facilitate their development and growth.

Business Incubation Services: The range of support provided to start-ups by an incubator, including mentoring, training, funding assistance, networking, technical assistance, workspace and market-access support.

Mentoring and Coaching: Guidance and developmental assistance provided by experienced entrepreneurs, professionals or industry experts to help start-up founders improve their managerial, technical and entrepreneurial capabilities.

Business Training: Structured learning activities designed to improve entrepreneurs’ knowledge and skills in areas such as business planning, finance, marketing, management, product development and entrepreneurship.

Capacity Building: Activities designed to strengthen the knowledge, skills, capabilities and organisational competencies required by start-ups to operate and grow effectively.

Funding and Financial Support: Financial resources or assistance made available to start-ups through grants, loans, investment connections, subsidised services or other financing mechanisms.

Networking: The process through which entrepreneurs establish and maintain relationships with investors, mentors, customers, business partners, government agencies, other entrepreneurs and industry professionals.

Market Access: The opportunities and support available to start-ups for identifying customers, entering markets, developing partnerships and commercialising products or services.

Technology Start-up: A relatively young business whose products, services or business model depend substantially on technology, innovation or digital solutions and which has the potential for scalable growth.

Start-up Growth: The development or expansion of a start-up as reflected in indicators such as revenue, customers, employees, market reach, investment, product development and business scale.

Innovation Hub: A physical or organisational ecosystem that brings together entrepreneurs, innovators, investors, mentors, technical resources and other stakeholders to support innovation and enterprise development.

Lagos Innovation Hub: The innovation-hub environment/programme within Lagos through which technology entrepreneurs and start-ups receive or access entrepreneurial support, incubation, networking, infrastructure and related innovation services. Lagos State’s wider Lagos Innovates initiative provides structured support to technology and innovation-driven start-ups, including incubation, workspace, capacity building and ecosystem networking.

Project – Business Incubation Services and the Growth of Technology Start-ups: A Study of Start-ups at the Lagos Innovation Hub