1. Introduction
The present study is being carried out in Pakistan, which is a developing country and the sixth-largest country in terms of population, with 2.55% of the world’s overall population. It is worth noting that Pakistan’s population is important because its core parts are still young [
1]. According to the total population report, in Pakistan, 60% of young people are under 30 years. However, the majority of the population in the country is poor and unemployed, as the country’s daily income is less than USD 1.25, indicating that poverty in Pakistan is increasing. An economic survey shows that 24.3% of Pakistanis live below the poverty line [
1]. Most repugnant about this situation, which worsens every year, is that in the long run it will prove a threat to Pakistan’s economy [
2]. Unemployment is one of the most common obstacles to sustained and viable economic growth. The increasing rate of unemployment is the same among professional degree holders and other labor force. The Pakistan Bureau of Statistics 2018 shows that Pakistan’s labor force input rate is 54.4%. According to these statistics, 3.7 million people were unemployed from 2017 to 2018 [
3,
4]. A large amount of the labor force steadily increases, and also the increase in joblessness continues; therefore, new employment opportunities should also be created. [
5].
The Economic Survey of Pakistan shows a 5.6% unemployment rate in Pakistan, which encourages street crime, unemployment, and corruption. One of the reasons why entrepreneurial activities are not progressing is due to the lack of participatory conditions. It can be avoided if students acquire business training that will enhance their business skills, attitude, and knowledge. Such skills and knowledge increase not only self-employment but also employers’ work [
6]
To maintain a stable economy, the government needs to promote entrepreneurship because of entrepreneurship’s contribution to developing and developed countries and advanced economies. The literature suggests that substantial economic growth should be linked to entrepreneurs who use state investment for knowledge creation. Entrepreneurship is a key source of economic revolution, job creation, and business development; hence, it is pivotal to attract the young and educated to become entrepreneurs. According to Schumpeter, entrepreneurs are willing and able to turn new ideas or inventions into successful innovations. The idea that entrepreneurship leads to economic growth is one explanation of the remaining parts of the theory of endogenous growth, so it continues to be debated in academic economics [
7]. Nowiński and Haddoud [
8] reported that in the field of entrepreneurship, a key attribute that needs to take root in every new venture is the intention to start a business. Thus, entrepreneurial intention concerns the individual’s attitude towards starting a new business. They further explored that entrepreneurship is even more suitable once there are fewer jobs in the labor market. Storey [
9] found that knowledge of entrepreneurship will be beneficial when new graduates cannot find their ideal jobs or fall back when the economy slows, forcing some new graduates to turn to entrepreneurship. Also, Akinbola, et al. [
10] claim that students’ propensity for entrepreneurship is an essential framework for forming a business start-up. Students’ attitudes, behavior, and entrepreneurial compassion may encourage the intention and desire to launch new business activities in the future. Students trained in educational institutions or in incubators are on the way to becoming initiators of successful entrepreneurs. Therefore, the concept of the business start-up among students is a vibrant field that has to be further discovered in order to understand and appreciate the practice of starting new businesses [
11].
Another educational program recognized by various higher educational institutions to promote entrepreneurship is the business incubation program. Business incubation can provide resources for start-ups such as networking services, office space, training programs, consultancy, and other essential services, but it also aims to promote intranets and knowledge transfer between start-ups. The tendency towards entrepreneurial behavior can be positively influenced by several aspects such as business incubators and internships [
12]. The existence of a business incubator in a higher education institution is vital to support and assist primarily students who have a business to be able to expand and advance their business activities. In addition, business incubators also help motivate new entrepreneurs to turn their business ideas into real businesses. In order to assess the possible benefits of a business incubator (BI), it is essential to explore the effects of services provided by the business incubators on entrepreneurship development [
13].
In Pakistan, there are many universities, including public and private universities, that offer courses in different specialties. Some of these institutions help provide inventive business ideas and reduce unemployment. Graduates of limited universities in Pakistan are less competitive than foreigners. Still, start-ups are in full supply; nevertheless, Pakistan even now suffers from the shortage of capital, and the value of getting capital from nongovernmental sources is very high because of their grasping nature. In addition, entrepreneurs here lack the entrepreneurial skills and financial support needed to successfully conduct business in this globally competitive business environment [
14]. As a way of guiding strong economic growth, the number of incubators around the world is increasing, so governments and other agencies that support these incubators are paying more attention to assessing their performance [
15].
There are a large number of university students in various fields of expertise in Pakistan. Some of them have excellent, innovative, and appropriate ideas, which can serve as development tools to support a weak economy and reduce unemployment. These business ideas show high potential for success if they are provided with logistics and financial support. The majority of Pakistani business people cannot market their ideas or get the funding they need. They do not even have the required set of business skills, though they have the required information [
16].
Over time, it was gradually recognized that innovations and entrepreneurship are most important to boosting Pakistan’s economic growth. Therefore, measures are being taken to extend science and technology initiatives to improve the economy. The efforts to establish the environment of venture creations and their success gave birth to business incubators in Pakistan [
17]. There is a considerable research gap in this research area, especially in Pakistan. This study attempts to contribute to the incubation literature by examining the role of business incubators and the mediating and moderating role of business start-up and government regulations for entrepreneurship in entrepreneurship development.
The following sections of this article discuss the development of hypotheses, followed by the research methods section, which provides detailed information about the research design, sampling, data collection tools, measurement scales, and analysis process and concludes with a description of the data analysis and results. This section shows a discussion of the theoretical and practical implications of the research. In the section, the limitations of the study and future research direction are highlighted. Finally, in the conclusion section, the overall conclusions of the study are discussed.
5. Discussion
The focus of this paper was to examine the effects of the services provided by business incubators (i.e., network services, capital support, and training programs) on entrepreneurship development. It also examined the mediating and moderating role of business start-up and government regulations in entrepreneurship development. Thus, the results of this study indicate that the reliability and validity of scales measured for networking services 0.878, capital support 0.91, training programs 0.906, business start-up 0.91, government regulations for entrepreneurship 0.728, and entrepreneurship development 0.939. Since this technique is suitable for testing multiple levels of a theoretical framework, and can simultaneously evaluate several relationships between observed and latent variables [
79,
80]. The suggested path coefficients of the model provide empirical support for all nine hypotheses used in this study. These hypotheses were found positive and significant with t-value > 2 and
p-value < 0.05 [
17,
54,
81,
82].
The results of this study illustrate that networking services have a positive effect on entrepreneurship development. The results related to hypothesis involve coefficient beta 0.237, standard error 0.04, t-value 6.043 > 2, and
p-value 0.000 < 0.05, supported by the previous study [
34]. Mahmood, Jamil and Yasir [
17] found similar results in which involvement in networking activities is an essential role for business incubators because it links entrepreneurs in and out of business incubation with key investors in the community. These learning opportunities are important because communities with a wider network of peers tend to enjoy higher levels of entrepreneurship and economic growth. These results are in agreement with Khan, Arafat, Raushan, Saleem, Khan, Khan and Entrepreneurship [
34], who found that networking services can help entrepreneurs attract more customers, knowledge and ultimately achieve business growth and increase profits.
The results of the present study indicate that capital support has a positive effect on entrepreneurship development. The results include the beta coefficient 0.085, standard error 0.04, t-value 2.18 > 2, and
p-value 0.030 < 0.05. Hence, the hypothesis is supported. The same findings were found in the previous study [
51,
83], in which he reported that after World War II, venture capital became a source of financing in the United States and was subsequently used around the world. He further added that new and untried ideas are highly uncertain, making it impossible to use funds from traditional financial sources, such as debt and equity. In line with the previous study [
33], access to capital plays a key role in supporting business and entrepreneurship development, in both direct and indirect ways.
Results from the statistical analysis of this study present that training programs have a positive effect on entrepreneurship development. The significant results were found with positive coefficient value 0.149, standard error 0.05, t-value 2.972 > 2 and
p-value 0.003 < 0.05. Meanwhile, the hypothesis was supported based on a significant level. These results are in line with a previous study [
14]. These findings indicate that training programs can play an important role in taking advantage of new business opportunities and inspiring potential candidates to set new business plans or to help improve the capabilities of existing entrepreneurs or solve specific business problems.
The results of the present study specify that business start-up has a positive effect on entrepreneurship development. The significant results were found with positive coefficient value 0.389, standard error 0.06, t-value 6.817 > 2 and
p-value 0.000 < 0.05. Correspondingly, these results are in line with past studies [
84,
85]. Global Entrepreneurship Monitor South Africa (2012) states that one-third of the country’s economic growth momentum can be attributed to the dynamics of business start-up. They also contribute to promoting research and innovation systems and bring proactive values into society. Rafiq [
86] states that a business start-up has multiple impacts on the economy, such as turning an idea into something practical, realizing product market adaptability, and creating long-term value for the company. Alibaba, a start-up in the past, triggered the development of S small and medium enterprises in China, and a large number of Google employees have more than USD 5 million in value. The start-up Finja popularized the use of mobile wallets by injecting USD 1 million from Bridge Round. Karlo Compare provides services for consumers of personal finance products. Karlo compares the USD 20,000 angel capital raised. Repair Desk operates a mobile repair shop and provides related available inventory. This operating software maximizes productivity. It started with USD 40,000 in seed funding. Zameen is the well-funded start-up in Pakistan, with venture capital of USD 31.1 million. Zameen has become Pakistan’s largest real estate market.
Our results also illustrate that government regulations for entrepreneurship have a positive effect on entrepreneurship development and found a positive beta coefficient of 0.174 standard error 0.05, t-value 3.6 > 2, and
p-value 0.000 < 0.05. Thus, this hypothesis was supported by the previous study [
87]. Pereira and Maia [
88] argued that government policy is any course of action aimed at regulating and improving the situation of small and medium-sized enterprises, i.e., conditions for government support, implementation, and funding policies. According to this definition, government policies on entrepreneurship practices are designed to encourage entrepreneurship by creating an enabling environment for entrepreneurs.
Our results also indicate that business start-up positively mediated the relationship among networking services, (positive value of beta coefficient 0.084, standard error 0.02, t-value 4.536 > 2, and
p-value 0.000 < 0.05), capital support (positive value of beta coefficient 0.036, standard error 0.02, t-value 2.365 > 2, and
p-value 0.018 < 0.05), training programs (positive value of beta coefficient 0.246, standard error 0.04, t-value 6.199 > 2, and
p-value 0.000 < 0.05) and entrepreneurship development. The mediating role of the start-up was also found by the previous study [
52]. It was concluded that after a period of recession, entrepreneurial activity has begun to pick up and take root in various regions of the world, but incubation services remain a challenge for young, high-growth potential companies in most states. According to Martínez, et al. [
89], the business incubators provide a real platform for young entrepreneurs, from where they start their journey to create new businesses, and further, it contributes to the survival of firms and entrepreneurship development.
The findings of this study indicate that government regulations for entrepreneurship moderate the relationship between a business start-up and entrepreneurship development with the positive beta coefficient 0.159, standard error 0.03, t-value 5.292 > 2, and
p-value 0.000 < 0.05. These results are supported by Shu, et al. [
90], Peng and Liu [
91,
92]. Findings from the literature argue that legislators had better discontinue subsidies to build generic start-ups, reacting to companies with growth potential. This argument relates to how these regulations guide people in starting limited companies that may be unsuccessful or have minor economic impacts, as well as small-scale employment. Previous studies suggest that the government policies related to entrepreneurial practices aim to encourage entrepreneurship development by creating an enabling environment for entrepreneurs. Thus, government continues to promote the establishment of most of the support programs, sponsorship, and management; especially in developing countries, the government’s proclamation on entrepreneurship will go a long step towards sustainability and positivity. [
24,
90,
93].
6. Conclusions
This study expands the existing knowledge by exploring the importance of business incubators, business start-up, and government regulations to promote entrepreneurship. This study aims to develop a concept to examine the role of business incubators in providing grater services (networking services, capital support, and training programs) to support entrepreneurship development. Secondly, it also examines the mediating and moderating role of business start-up and government regulations for entrepreneurship. Thus, the results of the present study specify that promoting entrepreneurship development is essential to improving a weak economy, and to improve entrepreneurship development. Government regulations and services of business incubators including training programs, capital support, and networking services play a crucial role in supporting entrepreneurship development.
Given the fact that there are many challenges facing entrepreneurs, including a lack of technical and educational skills, inadequate infrastructure and facilities, and support systems, it is hardly surprising that most small businesses do not survive more than a few years. In this situation, business incubators can play an essential role in ensuring the growth and development of small businesses. Several studies conducted throughout the world clearly show the critical role played by business incubators in economic growth and entrepreneurship development. The government of Pakistan has taken several initiatives to support entrepreneurs by establishing institutions such as the National Incubation Centre and the Small and Medium Enterprises Development Authority-SMEDA for Entrepreneurship, which does a great job in incubating and handling start-ups. However, much needs to be done to develop a sustainable entrepreneurial ecosystem. Private organizations must advance and actively act as incubators for start-ups. There is also an urgent need for public–private initiatives in this sector.
Our findings suggest that the government must look at setting a single window to manage business incubators throughout the country and to coordinate the activities of all institutions and companies that are in the process of incubating new business. Also, there is a need to establish an industry incubator to improve manufacturing because most start-ups now have a service-based business model. Industries like tourism, dry fruit processing, dairy and poultry farming, and fisheries provide excellent opportunities for small entrepreneurs in the country, and there must be an incubator who specializes in these areas.
The present study suggests that in order to promote an entrepreneurial culture, governments in developed and developing countries should focus on business incubation and government regulations for entrepreneurship because, without government regulations, business incubators alone are not enough to understand the entire entrepreneurship ecosystem.