A national survey: an examination of Entrepreneurship Centres in Pakistan.
Rajput, Ansir Ali ; Murad, Ali
ABSTRACT
This study is conducted to perform an in-depth analysis of
Entrepreneurship Centres (ECs) in Pakistan and to investigate the issues
pertaining to the growth and effectiveness of ECs in Pakistan.
Furthermore, to establish what needs to be done in order to improve the
performance of existing centres. This two-part study looks at the
characteristics of the ECs and then examines the differences between
formal ECs and informal ECs. The findings indicate that both the formal
and informal ECs are in growth phase. The findings of this study will
assist students, faculty, staff, administrators, heads, and other
stakeholders to understand strengths and weaknesses of Entrepreneurship
Centres (ECs) in Pakistan.
KEYWORDS: Entrepreneurship, Innovation, Entrepreneurs, Business
Plan, Formal Entrepreneurship Centres, Informal Entrepreneurship Centres
ENTREPRENEURSHIP EDUCATION
According to Minniti, Bygrave and Autio in 2005 entrepreneurship
develops in those countries, which have high educational endowments.
Therefore, increased investment in entrepreneurial educational
infrastructure creates economic values in the society.
Katz highlighted history of Entrepreneurship education in the world
in 2003. In his study he also included economic and agricultural
literature of 1876. In its true form Entrepreneurship education was
started in 1970s. University of Southern California launched the first
graduate and undergraduate concentration in entrepreneurship in early
70s.
Katz in 2003 and 2004 said that the increasing prominence of
entrepreneurship and related fields (small and family business,
corporate entrepreneurship, and so on) can also be seen in the
significant rise in the number of endowed positions (chairs or
professorships) in entrepreneurship and related fields at colleges and
universities, from the first one in 1963, the second in 1975, to 25 in
1987. Non-U.S. positions grew from four in 1991, to 34 in 1999, and to
158 in 2003, for a worldwide total of 563 positions.
Research of Solomon, Weaver, and Fernald in 1994 shows that by the
early 1980s, over 300 universities were reporting courses in
entrepreneurship and small business and by the 1990s that number grew to
1,050 schools.
ENTREPRENEURSHIP CENTERS
Many development institutions are experimenting to promote
entrepreneurship as a way to help individuals. The World Bank and the
United States Agency for Development (USAID) have created their own
Small and Medium Enterprise divisions to provide funding and
entrepreneurial training in developing nations (USAID, 2005; World Bank,
2003). America has promoted entrepreneurship and innovation in the
country which has made it economically great.
In Cali, Colombia, Centre for Entrepreneurship Development-ICESI
(CDEE-ICESI) with the support of university community works to promote
entrepreneurial culture by providing new enterprise development, and
entrepreneurial education. In Ahmedabad, India, Centre for Innovation,
Incubation and Entrepreneurship (CIIE) offers incubation support to
businesses.
In Pakistan, one of the entrepreneurial initiatives in academia is
Institute of Business Administration (IBA) Karachi, where Centre for
Entrepreneurship is established in 2006 for training to set up new
businesses. LUMS Entrepreneurship & SME Centre in Lahore has been
developed to build an entrepreneurial culture in the country and to
support entrepreneurs and SME's for future growth and prosperity of
Pakistan.
In the corporate sector the initiatives in Entrepreneurship are
also emerging and some of them are as follows: In Karachi, Shell Tameer
program has helped about 27000 young entrepreneurs through workshops,
seminars and meetings. The Indus Entrepreneurs (TiE) is a global
non-profit organization that promotes entrepreneurship.
Despite the enormous growth of entrepreneurship education
throughout the world, no research exists on the current state of
entrepreneurship centres in Pakistan. The purpose of this descriptive
study is to perform a more in-depth examination entrepreneurship centres
throughout Pakistan. This study on entrepreneurship centres in Pakistan
will provide an in-depth analysis of entrepreneurship centres and their
impact in Pakistan.
The results obtained from this study will be used as
recommendations to those formal and informal enterprises and
institutions that want to excel in the field of entrepreneurship.
LITERATURE REVIEW
Kuratko in 2005 conducted a study in which he found that the number
of colleges and universities that offer courses related to
entrepreneurship has increased greatly from a very few courses in 1970s
to over 1,600 in the year 2005.
Finkle, Kuratko and Goldsby (2006) conducted a research in which
they performed an in-depth analysis of 146 entrepreneurship centres
across United States. They found that top-ranked centres were richer in
terms of endowed chairs as compared to non-ranked centres. Top-ranked
centres also had an academic advantage over non-ranked centres that they
were offering more comprehensive graduate programs in Entrepreneurship.
In short, top-ranked centres were provided with more resources and
professionals in the field of entrepreneurship.
Upton in 1997 performed a research on Entrepreneurship Centres. The
study was named as "Successful Experiences of Entrepreneurship
Centre Directors". She performed a detailed analysis of nine
entrepreneurship centres. As a result of this study she developed a list
of best practices for starting, directing, funding, managing, and
marketing each entrepreneurship centre.
Sandberg and Gatewood (1991) examined research concentration,
budgeting, financial resources, and constituents for entrepreneurship
centres. Pfeffer (1972) and Pfeffer and Salancik (1978) found that
larger organizations have larger pools of resources that can be used to
gain control over the entities of their environment, which mediate critical resources.
Other than the studies just mentioned, there is little knowledge to
be generated from the literature regarding entrepreneurship centres.
Given the lack of research in this area and the importance of
entrepreneurship centres in today's world, we surveyed the entire
population of entrepreneurship centres (72) in Pakistan. To date, this
is the largest sample of centres ever examined in Pakistan.
We took the entire population of Entrepreneurship Centres (ECs)
known to us for the survey. The entire population consisted of 72 ECs
located in Pakistan. The list of centres was obtained from Higher
Education Commission, Islamabad, website on Entrepreneurship Centres,
personal references and an in-depth search of websites.
The Survey forms for formal and informal ECs were designed
separately. The survey form for formal ECs consisted of 22 items whereas
the survey form for informal ECs consisted of 21 items and took
respondents, on average, about 15 minutes to complete. The survey form
was developed through the authors and was pre-tested with Heads of 7 ECs
(2 formal, 5 informal). Appropriate changes were made based on the
comments of the pretest group. Among 72 ECs 65 survey forms were sent to
Informal ECs and 7 survey forms were sent to Formal ECs. We received
responses from 25 program heads--20 from informal ECs and 5 from formal
ECs--for a response rate of 34.7% %.
For this study we define formal EC as degree/diploma awarding
institutions having a centre for entrepreneurship or academic curriculum
in entrepreneurship or faculty that performs research in field of
entrepreneurship. Furthermore, has external out reach activities. For
the purpose of this study, an entrepreneurship centre is considered
formal EC if it is listed on Higher Education Commission, Islamabad. The
informal ECs are the centres that provide financial and technical
guidance and assistance for business start-ups and business growth to
promote entrepreneurial culture in the country .The study did not
include small business development centres. In the study the word
participant is used for students who are taking course(s) in
Entrepreneurship and the word client is used for an Entrepreneur who
seeks guidance and assistance from informal ECs.
In this descriptive study, we broke down our sample into two
categories: (1) Mean for formal ECs; and (2) Mean for informal ECs to
examine the differences between the formal ECs and the informal ECs.
A. PROFILE OF ENTREPRENEURSHIP CENTRES
Average Age
Average age of formal ECs is 6 years with a minimum age 1-4 years
and maximum age 9-12 years. On the other hand, average age of informal
ECs is 4 years with a minimum age 1-4 years and maximum age 9-12 years.
There is a significant difference of 2 years in average age of formal
and informal ECs respectively.
Experience of Heads of ECs
The average tenure of association of heads with their formal ECs is
3 years. The average tenure of association of heads with their informal
ECs is found to be 5 years with the minimum tenure 1-4 years and a
maximum tenure 9-12 years. There is a significant difference of 2 years
in average tenure of association of heads of formal and informal ECs
respectively.
OBJECTIVES AND SERVICES OF ENTREPRENEURSHIP CENTRES
Objectives
In formal ECs, 71% have objective to enhance /impart education, and
29% to establish business incubators. Therefore the prime objective of
formal ECs is to enhance /impart education. In informal ECs, 36% have
the prime objective to provide trainings, 33% to provide business
support, 11% to raise funds, 11% to commercialize the research, 6% to
develop business incubators and 3% of the informal ECs have the
objective to promote youth enterprises.
Internal and External Activities of Formal ECs
Case studies are the most common internal activities among 25% of
the formal ECs.18.75% of the formal ECs are involved in the internal
activities of Journals/Publications, 18.75% in Business Plan
Competition, 18.75% in Student Clubs and 18.75% of the formal ECs are
also involved in the internship programs. The most common external
activities of the formal ECs are Seminars/ Workshops (31.25%) and Guest
Speakers (31.25%). The least common external activities of formal
centres are Executive education (18.75%) and incubation services
(18.75%).
Services Offered by Formal and Informal ECs
The most common undergraduate course is Introduction to
Entrepreneurship (66.67%). The least common undergraduate courses are
Entrepreneurial growth (16.66%) and Business Plan Development (16.67%).
The most common entrepreneurial services offered by informal ECs
are Trainings/Workshops (20%) and Business Support Services (20%)
followed by Business Plan Development (17.14%) and Feasibility
development (17.14%). The least common entrepreneurial services offered
by informal ECs are of Micro Financing (11.42%) and Exhibitions and
Fairs (11.42 %). Some of the informal ECs are also providing Technology
up gradation services (1.42) and office space facility (1.42%) to the
entrepreneurs.
The informal ECs in Pakistan provide entrepreneurial assistance to
different levels of business operations. Informal ECs are mainly
providing informal entrepreneurial services to SMEs (38.46%). The
informal centres are also significantly providing services to micro
finance (30.76%) and Cottage industries (30.76%) level of business
operations.
RESOURCES
Subscription of Entrepreneurship Journals
Most of the formal ECs have a subscription of 4-6 Entrepreneurship
journals but some of them also have a subscription of 7-9 journals. The
percentage of subscription of 4-6 Entrepreneurship journals (60%) is
higher as compared to 7-9 subscriptions (40%).
MoUs/Agreements of Informal Ecs
Most of the informal ECs have signed 4-6 MoUs/agreements with other
organizations but some of them also have signed 1-3 MoUs/agreements.
There are only two informal centres in Pakistan, which have signed
maximum number of MoUs/agreements i.e.7-9(10%). The percentage of 4-6
MoUs/agreements (60%) is higher as compared to 1-3 MoUs/agreements
(30%). The least percentage of MoUs/agreements is 7-9(10%).
Faculty of Formal ECs
The average number of permanent faulty members in the formal ECs is
3. The average number of visiting faculty members at formal ECs is also
3.
Employees of Informal Employees
The average number of employees at informal ECs is 15 employees
with the minimum number of 1-5 employees and maximum number of 11-15
employees. Some of the informal ECs have significantly 36-40 employees,
which is an exceptional case. The percentage breakdown shows that 30%
informal centres have 1-5 employees, 30% have 6-10 employees and other
30% have 3640 employees. The remaining 10% centres have 11-15 employees.
Qualification of Faculty in Formal ECs
Among the formal ECs, average number of faculty members with PHD/MS
in Entrepreneurship area is 1. Most of the formal ECs (60%) do not have
any faculty member with PHD/MS in Entrepreneurship area but only 40% of
the centres have 1-5 faculty members with specialization in
Entrepreneurship.
Among the formal ECs, the average number of faculty members with
MBA in Entrepreneurship area is 1. Most of the formal ECs (60%) do not
have any faculty member with MBA in Entrepreneurship area but only 40%
of the centres have 1-5 faculty members with specialization in
Entrepreneurship.
Qualification of Employees in Informal ECs
The average number of employees in informal ECs with PHD/MS in
Entrepreneurship area is 1. The 50% of the informal ECs do not have any
faculty member with PHD/MS in Entrepreneurship area and 50% % of the
centres have 1-5 faculty members with specialization in
Entrepreneurship. The average number of employees in informal sector
with MBA in Entrepreneurship area is 2. Most of the informal ECs (80%)
do not have any faculty member with MBA in Entrepreneurship area but
only 20% of the centres have 1-5 faculty members with specialization in
Entrepreneurship.
Participants/Clients of ECs
The formal ECs had enrolled average number of 126 participants in
their Entrepreneurship Programs last year. The average number of clients
enrolled in informal ECs is 110 clients. The percentage breakdown shows
that 40% of the informal ECs enrolled 1-50 clients, 30% enrolled 201-250
clients, 20% informal ECs enrolled 51-100 clients and only 10% informal
ECs enrolled 151-200 clients. It demonstrates that most of the informal
ECs enrolled 1-50 clients in their Entrepreneurship programs last year.
Sources of Funds
The main sources of funds for the financial operations of formal
ECs are trainings, workshops and grants. The percentage breakdown shows
that 33.33% of the formal ECs generate funds through trainings, 33.33%
through workshops and 33.33% through grants.
Among the informal ECs, 29.6% generate funds through grants, 22.2%
through donations, 14.8% through trainings, 14.8% through workshops, and
14.8% through business support programs. The least common sources of
funds for informal ECs are the deposits of the government and local
bodies (3.7% informal ECs).
LEGAL STATUS AND ENTREPRENEURIAL INITIATIVES
Ownership of ECs
All the formal ECs are private institutions. The 50% of the
informal ECs are public institutions, 45% are private and only 5%
centres have public private ownership.
Status of ECs in Their Respective Organizations/Institutions
All the formal ECs exist in the Department of Management in terms
of their presence in institutions. On the other hand, 70% of the
informal ECs exist as an independent department, 25 % in social welfare
department and only 5% are working in the capacity of Training Wing in
terms of their presence in the organization.
Legal Status
Regarding the legal status of formal ECs all the formal ECs are
listed with Higher Education Commission, Islamabad because the primary
purpose of formal ECs is Academics. On the other hand, most of the
informal ECs are non-profit organizations (60%) and govt. funded
programs (20 %) but others are trusts (10%), and for profit (10%)
organizations.
Awareness about Entrepreneurial Initiatives in the Country
All the formal ECs are aware of the initiatives of HEC, Islamabad
regarding Entrepreneurship centres (ECs). On the other hand only 70% of
informal ECs are aware of the initiatives of the government regarding
Entrepreneurship Centres while 30% of informal ECs are not aware of the
initiatives of the government regarding ECs.
Conferences on Entrepreneurship
All the formal ECs have attended 5 conferences on the average,
which were held in the domain of Entrepreneurship. The informal ECs have
attended 3 conferences on the average regarding Entrepreneurship. The
percentage breakdown shows that 40% of the informal ECs have attended
1-3 conferences, 30% informal ECs have not attended any conference, 20%
have attended 4-6 conferences, and only 10% of the informal ECs have
attended conferences in the domain of Entrepreneurship.
Workshops on Entrepreneurship
All the formal ECs have attended 5 workshops on the average, which
were held in the domain of Entrepreneurship. On the other hand, informal
ECs have attended 3 workshops on the average regarding Entrepreneurship.
The percentage breakdown shows that 40% of the informal ECs have
attended 1-3 workshops, 30% ECs have not attended any workshop, 20% have
attended 4-6 workshops, and only 10% of the informal ECs have attended
(10-12) workshops in the domain of Entrepreneurship.
ADMINISTRATION OF AN ENTREPRENEURSHIP CENTRE PROBLEMS AND
CHALLENGES
Main Responsibilities of Heads of ECs
The main responsibilities of the heads of formal ECs are management
of professional development services (33.33%), conducting trainings and
workshops (33.33%) and undertaking research projects (33.33%). All these
responsibilities of the heads are equally common among all the formal
ECs.
The main responsibilities of the heads of informal ECs are program
evaluation, fundraising and exploring new resources for their informal
Entrepreneurship Centres. Program evaluation is most common
responsibility (38.46%) followed by exploring new resources for centres
(32.69%). The least common responsibility of heads of informal centres
is fundraising (28.84%).
Major Issues Faced by ECs
All the formal ECs are equally facing the problems of funding
(33.33%), creating awareness about Entrepreneurship among masses
(33.33%), and finding qualified faculty to strengthen and expand their
entrepreneurial academics(33.33%). On the other hand, the biggest issue
faced by informal ECs is to create awareness about entrepreneurship
among the masses (32.78%) followed by getting recognition in the society
in the domain of Entrepreneurship to attain national entrepreneurial
status (24.59%).Some of the informal ECs are also facing the funding
problems(22.95%) and recovery of funds and managing follow ups(19.67%).
CONCLUSION AND IMPLICATIONS
This study fills a gap in Entrepreneurship research by surveying
the largest number of Entrepreneurship Centres (ECs) in Pakistan ever
attempted and obtaining in-depth information about the characteristics
of these centres. This descriptive study breaks down the sample into two
categories: formal ECs and Informal ECs.
Formal ECs on average are 2 years older. The heads of Informal ECs
on average are 2 years more experienced as compared to the heads of
formal ECs. There is a significant difference between the objectives of
formal and informal ECs. The academic component drives the formal ECs
whereas the trainings, fundraising and business support component drives
the informal ECs.
Among the internal activities of the formal ECs, they concentrate
more on case studies as compared to other internal activities. On the
other hand, the external activities of formal ECs include organizing
seminars/workshops to create awareness about entrepreneurship and
arranging resource persons and guest speakers to promote
Entrepreneurship education.
Introduction to Entrepreneurship, which is the basic course, has
the highest percentage among the undergraduate courses being offered in
all the formal ECs of the country. On the other hand, the informal ECs
are providing the primary services of Trainings/workshops, business
support services, and business plan development. Moreover, informal ECs
are primarily focusing on SMEs to promote entrepreneurial culture in the
country. The Entrepreneurship academics component drives the formal ECs
and Business Support Services (other than academics) component drives
the informal ECs.
The average number of subscriptions of Entrepreneurship Journals
for the formal ECs is 6. The average number of Memorandums of
Understanding/agreements signed by informal ECs with other organizations
to support their initiatives is 4.
There is no significant difference regarding the number of
permanent and visiting faculty members in the formal ECs. But if we make
a comparison between the number of faculty members and staff in formal
and informal ECs we find that there is a significant difference of 10
more employees on the average in informal ECs. Both the formal and
informal sectors have a very low number of employees who are specialized in the field of Entrepreneurship. The formal ECs on average have 15 more
participants as compared to the informal ECs.
There is no significant difference in the main sources of funds for
both the formal and informal ECs of Pakistan. Most of the formal as well
as informal ECs generate funds mainly through trainings, workshops and
grants for their financial operations.
It is found that all the formal ECs are private institutions
irrespective of informal ECs 45 % of which are only private
organizations.
There is significant difference between formal and informal ECs in
terms of their presence in the organization. All the formal ECs exist in
Department of Management and most of the informal ECs exist as
Independent Departments.
There is a significant difference in the legal status of formal and
informal centres. All the formal ECs are listed with HEC, Islamabad with
the primary purpose of academics. Most of the informal ECs in Pakistan
are non profit organizations and govt. funded programs but with the
purpose of providing entrepreneurial services other than academics
(Tables 9e and 9f). Most of the informal ECs exist as Social
Entrepreneurial Ventures (SEVs) in the country. SEVs are of three types.
They are non-profit organizations entering into business to finance
their social service operations (Boschee, 1995; Leadbeater, 1997; Mort
et al., 2003). They can also be for-profit ventures that define their
mission as having a double bottom line (Dees, 1998b; Pomerantz, 2003).
Finally, they can be cross-sector SEVs, collaborative initiatives
engaging non-profit, for-profit and/or public organizations to solve
particularly challenging social problems (Bornstein, 1998; Kanter, 1999;
Waddock and Post 1991).
All the formal ECs are aware of the initiatives of HEC, Islamabad
regarding Entrepreneurship centres (ECs). On the other hand only 70% of
informal ECs are aware of the initiatives of the government regarding
Entrepreneurship Centres
The formal ECs have on the average attended 3 more conferences and
workshops on the average as compared to informal centres which may give
them an advantage in getting more awareness regarding Entrepreneurial
initiatives and issues in Pakistan.
There is a significant difference in the responsibilities of the
heads of the formal and informal Entrepreneurship Centres because of the
basic difference in their primary objectives and services. The heads of
formal ECs have to monitor and evaluate academics whereas the heads of
informal centres have to monitor and evaluate the activities of their
Entrepreneurship Programs and to manage resources along with exploring
new resources for their centres.
The main issues faced by both the formal and informal ECs are
almost the same. Both the sectors are facing the challenges of creating
awareness about Entrepreneurship in Pakistan and lack of funds for
entrepreneurial initiatives. But the informal ECs are additionally
facing the challenges of getting recognition for attaining national
entrepreneurial status and recovery of funds.
In a nutshell, we can say that for formal ECs the heads'
perceptions of measures of success for a centre is courses offered,
number of students in the program student evaluations, and funding
generated. They put Entrepreneurship education first. For informal ECs
the heads' perception of measures of success for a centre are
recognition, funding generated and clients enrolled in Entrepreneurial
Programs. The findings of the study exhibit that the number of both
formal and informal ECs has grown tremendously in the last five years
from none to about 72 ECs all across Pakistan. All the ECs whether
formal of informal are in their initial phases of establishment and so
many challenges are hampering their growth in the country. The study
highlights that the biggest factor to hamper the growth of ECs in
Pakistan is lack of vision. At the same time they are seriously facing
the biggest challenge of lack of resources.
RECOMMENDATIONS
All the ECs, whether formal or informal lack vision to set the
direction for achieving their entrepreneurial goals. The
entrepreneurship professionals should be produced in order to manage,
direct and grow these formal and informal ECs of Pakistan. The
entrepreneurship experts will be able to develop the vision for ECs in
Pakistan to find the right direction for Entrepreneurship Field. The
heads of Informal ECs can also help the formal centres in building up
their academic programs of Entrepreneurship.
The specialization courses of Entrepreneurship are not offered in
formal ECs. There is a strong need to offer specialization and diploma
courses in the field of Entrepreneurship in all the formal ECs.
Lack of funds is also a serious issue faced by both the formal and
informal ECs, which contribute towards slowing their pace of
development. Both foreign agencies and local government should not only
ensure channels to support and assist ECs but they should also specify
the evaluation and monitoring of Entrepreneurial initiatives to measure
and enhance their growth. The more comprehensive management courses
should be offered in formal ECs and more elaborated Entrepreneurial
management skills should be focused by informal ECs to create effective
Entrepreneurial management in these ECs.
For formal ECs, the issue of funding to carry out the financial
operations can be solved by opting for venture capital and Angel funds
to create a pool of financial resources for strengthening and expanding
their academic activities. The formal ECs can overcome the problem of
finding the qualified faculty by hiring foreign qualified faculty
members with specialization in Entrepreneurship. Formal ECs can also
create networking with informal ECs to acquire the resource persons for
academics. The heads of the centres should assign more responsibilities
to their faculty members in order to promote Entrepreneurial culture in
the country. The third issue faced by formal ECs is about creating
awareness of the Entrepreneurship among masses. This issue can be
resolved by involving electronic and print media. The government can
also play its role by organizing conferences, workshops/trainings at the
national level in the domain of Entrepreneurship.
On the other hand, the informal ECs can resolve the issue of
funding by opting for more extensive Entrepreneurial services like
trainings and workshops. They can also generate funds by providing
resource persons to formal ECs. Moreover, there is a strong need in the
country to establish venture capital, Angel funds and Micro Finance
institutions. The microfinance cooperatives should be developed and
promoted in the country. They act as a financial institution by offering
loans and savings as well as collecting repayments with interest high
enough to be profitable; and they also create cooperative groups among
borrowers in order to ensure payment and increase solidarity and social
ties (Woodworth, 1997). The government can also facilitate informal ECs
by providing more funds and donations.
The informal ECs are also facing the problem of creating awareness
among masses. Involving electronic and print media can create the
awareness. The government can also play its role by organizing
conferences, workshops/trainings at the national level in the domain of
Entrepreneurship. They can explore and manage new resources, build
criteria, legitimacy, and brand name recognition that are needed to
attain national entrepreneurial status. The Entrepreneurship centres
develop resources to achieve its goals of efficiency and improve
performance (Provan 1980; Pfeffer 1973, 1972, Zald 1967; Price 1963).
The survival of the EC depends on its efficiency to explore and manage
resources (Finkle 1998).
The informal ECs are also facing the challenge of getting
recognition to attain national entrepreneurial status. Revising the
credit policies and managing follow-ups efficiently can solve the issue
of recovery of funds.
FUTURE RESEARCH
Future research in this area should focus on development of a model
for the development of successful formal and informal ECs in Pakistan.
Specific variables should be considered to understand these
relationships for the development of the formal and informal ECs in
Pakistan.
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Ansir Ali Rajput, Mohammad Ali Jinnah University
Ali Murad, Mohammad Ali Jinnah University