Incubation

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Incubation

• History, concepts, services

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• New Venture Creation Process
• Options to Support Venture Creation
• Incubation Characteristics, Benefits, Risks
• Partnerships for Successful Incubation
• EU Policy Context Network and Programs

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Principle of entrepreneurship

• Goal The creation of value for company,
  employees, customers, stock-holders and society
• The Entrepreneur
• Links the innovation giver to the taker
• Target rapid growth gt 20-30 a year in revenue
  staff
• Focuses on Management / Market / Money
• For the entrepreneur Happiness is Positive Cash
  Flow and the satisfaction of meeting societal
  needs
• Characteristics Innovative, Goal-Oriented,
  Independent, with Vision and Tenacity
• Markets do not create entrepreneurs they create
  opportunity which the entrepreneur can sense and
  respond

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What are the main problems of starting growing
an enterprise ?

• Typically, in many situations
• Bureaucratic regulations. Not a level playing
  field
• Poor understanding of entrepreneur needs
• Inadequate management and marketing skills
• Lack of finance-credit, venture or angel capital
• Limited access to information and technology
• Difficulty in mobilizing a complete skills-set
• Little interest in training, quality, IPR
• Clan-mentality , lack of trust, cultural
  constraints
• Inability to look towards global markets
• Support services, such as business incubators,
  can help new ventures, to start, survive and
  succeed as modern, innovative SMEs

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Venture Creation Growth
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Partnership for Innovation

• Design the National Innovation System as a
  public/-private partnership, with focus on
  innovation and empowerment
• Formulate policies to reduce regulations, enhance
  creativity
• Invest in Knowledge Infrastructure S T
  education, R D, vocational training, Entreship
  Development, consultant services.
• Stimulate competition and rivalry both at home
  and abroad, to promote manufactures, quality,
  productivity, and exports
• Build networks strategic partnerships for
  technology trade, out sourcing of services and
  production in supply chain
• Facilitate linkages to university, finance,
  services, state agencies
• Scientific research and its commercialization can
  enhance access to a variety of assets for all
  communities

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Options for business support model to suit local
conditions

• Small Business Development Center or Incubator
  without walls in special situations
• Business Incubator to serve as knowledge hub with
  satellite centers, to nurture entrepreneurs start
  and succeed with their technical and social
  innovations
• E-incubation to use the potential of ICT for
  distance counseling through web portal
• International Business Incubator designed to
  serve foreign firms and facilitate entry into
  complex markets
• Industrial cluster to mobilize competitive
  advantage and stimulate cooperation for
  competition

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Evolution of the incubator model
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Approaches towards new models

• Split incubation (process) vs incubators (fixed
  place)
• Radiate virtual services from a fixed physical
  hub
• Encourage in-person interaction but not under one
  roof
• Deal with community as a cluster, not as
  individuals
• Promote peer guarantees, cooperative ventures
• Links with peers who have relevant experience
• Learn from experience of Micro-Credit,
  Micro-Equity, Vouchers
• Blend advanced technology with traditional
  knowledge
• Leverage ICT to bring incubation to incubatee,
  not vice-versa
• Internet kiosks in remote areas
• Push informal entrepreneurs up the value
• Based on local materials, skills, products,
  markets

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Technology business incubation ?

• Technology Business Incubation (TBI) is process
  that accelerates the development of selected
  young companies in knowledge-based products and
  services
• It must provide value adding business support
  services, both in the TBI and trough networks of
  professionals. It also offers workspace and
  shared office facilities
• Prerequisites to start a TBI market feasibility
  analyses business plan, with clear objectives
  key parameters
• The process is guided by a governing board and
  served by a trained management team, with
  involvement of public-private partners for the
  overall benefit of the community
• The path sustainability starts from Day-One

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Characteristics of incubation

• Business model, mission objectives to meet
  sponsor needs and local conditions
• Rigorous entrepreneur entry and exit processes
  Selection to assess entrepreneur quality, market,
  resources, innovation
• Advisory, Mentoring, Facilitation Services Basic
  assistance by staff Access to networks of
  external services from professionals, university,
  corps
• Flexible Workspace and Shared Facilities
• conference rooms, office equipment, IT
• Access to capital angel investors, venture
  capital funds, banks

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Characteristics of incubation

• Good location in business infrastructure
• Functional building. Layout design for active
  people-flow, smart IT
• Sustainability
• Continuous Monitoring of Incubators Clients, to
  help move towards plan objectives and milestones
• Strategic National International Alliances, to
  participate in incubator community global
  supply chain

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Incubation has its limitations

• Elitist caters only to potential winners
• depends on government in policy, initial
  funding
• Limited outreach, expensive few ventures per
  cycle
• Skills-intensive- requires strong management
• Poor at generating jobs but creates good ones
• Creates dependency shelters the entrepreneur
• . But incubators are growing due to their
  special features
• One-stop facility to provide counsel, skills,
  facilities
• Networking to mobilize services, mentoring,
  finance
• Facilitation to tackle regulations, enter markets
• Space/shared facilities at reasonable, flexible
  terms

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Myths about incubators

• Incubation is a simple concept, easy to implement
  
• The incubator is a building with shared
  facilities
• Incubators make money
• Incubators rapidly create employment
• Incubators create dependency, as in babies
  chicks

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TechPark-Academia-RD Linkage
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EU Policy context Programs and Contexts 1/3

• The EU started supporting the development of
  incubators in mid1980s as part of its regional
  policy. Since then around 150 organizations
  assisted
• Whilst initially EU focused on establishing
  incubators in lagging regions, in recent years
  it works more on incubators as support for high
  knowledge-intensive start-ups as part of the
  Lisbon Agenda.
• EU programs providing assistance to incubators
• the European Regional Development Fund (ERDF),
• European Social Fund (ESF)
• mainly for training, Leonardo Programme
• Sixth RD Framework Programme, and others

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EU Policy context Programs and Contexts 2/3

• EU provides grant aid to cover a proportion of
  capital and operation costs. Other EU programmes
  in the field of risk capital financing help
  incubator tenants.
• The new Structural Fund guidelines for the
  2008-13 period place even more emphasis on
  business incubation as an instrument of regional
  development, entrepreneurship, cluster formation,
  and competitiveness generally.
• EU also supports benchmarking and best practice

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EU Policy context Programs and Contexts 3/3

• EU-wide support networks EBN ( European Business
  Innovation Centre Network), Gates to Growth,
  and Science Alliance.
• National associations France, Germany, UK
• Key priority support incubator developments in
  the 10 new EU member states

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• New Venture Creation Process
• Options to Support Venture Creation
• Incubation Characteristics, Benefits, Risks
• Partnerships for Successful Incubation
• EU Policy Context Network and Programs