Incubation History, concepts, services . New Venture Creation ...


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Incubation History, concepts, services . New Venture Creation ...

  1. 1. Incubation History, concepts, services …
  2. 2. <ul><li>New Venture Creation Process </li></ul><ul><li>Options to Support Venture Creation </li></ul><ul><li>Incubation: Characteristics, Benefits, Risks </li></ul><ul><li>Partnerships for Successful Incubation </li></ul><ul><li>EU Policy Context: Network and Programs </li></ul>
  3. 3. Principle of entrepreneurship <ul><li>Goal: The creation of value for company, employees, customers, stock-holders and society </li></ul><ul><li>The Entrepreneur: </li></ul><ul><li>Links the innovation giver to the taker </li></ul><ul><li>Target rapid growth > 20-30% + a year in revenue & staff </li></ul><ul><li>Focuses on Management / Market / Money </li></ul><ul><li>For the entrepreneur: Happiness is Positive Cash Flow and the satisfaction of meeting societal needs </li></ul><ul><li>Characteristics: Innovative, Goal-Oriented, Independent, with Vision and Tenacity </li></ul><ul><li>Markets do not create entrepreneurs – they create opportunity which the entrepreneur can sense and respond </li></ul>
  4. 4. What are the main problems of starting & growing an enterprise ? <ul><li>Typically, in many situations: </li></ul><ul><li>Bureaucratic regulations. Not a “level playing field” </li></ul><ul><li>Poor understanding of entrepreneur needs </li></ul><ul><li>Inadequate management and marketing skills </li></ul><ul><li>Lack of finance-credit, venture or angel capital </li></ul><ul><li>Limited access to information and technology </li></ul><ul><li>Difficulty in mobilizing a complete skills-set </li></ul><ul><li>Little interest in training, quality, IPR </li></ul><ul><li>“ Clan-mentality” , lack of trust, cultural constraints </li></ul><ul><li>Inability to look towards global markets </li></ul><ul><li>Support services, such as business incubators, can help new ventures, to start, survive and succeed as “modern, innovative SMEs” </li></ul>
  5. 5. Venture Creation & Growth Equity capital Mezzanine/Venture Seed Family/ friends Finance Assembly plant Industrial estate Incubator Innovation center Garage Virtual Incubator Place Manufacturing Marketing validating Planning Process Global player Viability Entrepreneur Innovative idea Entr Dev Diversify Or die Grow adult Survive infant Start embryo
  6. 6. Partnership for Innovation <ul><li>Design the National Innovation System as a public/-private partnership, with focus on innovation and empowerment </li></ul><ul><li>Formulate policies to reduce regulations, enhance creativity </li></ul><ul><li>Invest in Knowledge & Infrastructure: S & T education, R & D, vocational training, Entre’ship Development, consultant services. </li></ul><ul><li>Stimulate competition and rivalry both at home and abroad, to promote manufactures, quality, productivity, and exports </li></ul><ul><li>Build networks & strategic partnerships for technology & trade, out sourcing of services and production in supply chain </li></ul><ul><li>Facilitate linkages to university, finance, services, state agencies </li></ul><ul><li>Scientific research and its commercialization can enhance access to a variety of assets for all communities </li></ul>
  7. 7. Options for business support model to suit local conditions <ul><li>Small Business Development Center or “Incubator without walls” in special situations </li></ul><ul><li>Business Incubator to serve as knowledge hub with satellite centers, to nurture entrepreneurs start and succeed with their technical and social innovations </li></ul><ul><li>E-incubation to use the potential of ICT for distance counseling through web portal </li></ul><ul><li>International Business Incubator designed to serve foreign firms and facilitate entry into complex markets </li></ul><ul><li>Industrial cluster to mobilize competitive advantage and stimulate cooperation for competition </li></ul>
  8. 8. Evolution of the incubator model Empowerment Incubators Technology Incubators Non-Tech Incubators Late 1990s, Early 2000s Women’s incubators Corporate incubators Virtual Incubators Art incubators Sector-based Incubators Multi-Purpose Incubators Mid-1990s Science Parks Basic Business Incubation Model Business Centers Early 1980s Industrial Estates Enterprise Agencies Managed Workspaces 1970s
  9. 9. Approaches towards new models <ul><li>Split incubation (process) vs incubators (fixed place) </li></ul><ul><li>Radiate virtual services from a fixed physical hub </li></ul><ul><li>Encourage in-person interaction but not under one roof </li></ul><ul><li>Deal with community as a cluster, not as individuals </li></ul><ul><li>Promote peer guarantees, cooperative ventures </li></ul><ul><li>Links with peers who have relevant experience </li></ul><ul><li>Learn from experience of Micro-Credit, Micro-Equity, Vouchers </li></ul><ul><li>Blend advanced technology with traditional knowledge </li></ul><ul><li>Leverage ICT to bring incubation to incubatee, not vice-versa </li></ul><ul><li>Internet kiosks in remote areas </li></ul><ul><li>Push informal entrepreneurs up the value </li></ul><ul><li>Based on local materials, skills, products, markets </li></ul>
  10. 10. Technology business incubation ? <ul><li>Technology Business Incubation (TBI) is process that accelerates the development of selected young companies in knowledge-based products and services </li></ul><ul><li>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 </li></ul><ul><li>Prerequisites to start a TBI: market feasibility analyses & business plan, with clear objectives & key parameters </li></ul><ul><li>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 </li></ul><ul><li>The path sustainability starts from Day-One </li></ul>
  11. 11. Characteristics of incubation <ul><li>Business model, mission & objectives to meet sponsor needs and local conditions </li></ul><ul><li>Rigorous entrepreneur entry and exit processes Selection to assess entrepreneur quality, market, resources, innovation </li></ul><ul><li>Advisory, Mentoring, Facilitation Services Basic assistance by staff + Access to networks of external services from professionals, university, corps </li></ul><ul><li>Flexible Workspace and Shared Facilities </li></ul><ul><li>conference rooms, office equipment, IT… </li></ul><ul><li>Access to capital: angel investors, venture capital funds, banks </li></ul>
  12. 12. Characteristics of incubation <ul><li>Good location in business infrastructure </li></ul><ul><li>Functional building . Layout design for active people-flow, smart IT </li></ul><ul><li>Sustainability </li></ul><ul><li>Continuous Monitoring of Incubators & Clients, to help move towards plan objectives and milestones </li></ul><ul><li>Strategic National & International Alliances, to participate in incubator community & global supply chain </li></ul>
  13. 13. Incubation has its limitations <ul><li>Elitist – caters only to potential “winners” </li></ul><ul><li>depends on government – in policy, initial funding </li></ul><ul><li>Limited outreach, expensive – few ventures per cycle </li></ul><ul><li>Skills-intensive - requires strong management </li></ul><ul><li>Poor at generating jobs – but creates good ones </li></ul><ul><li>Creates dependency – shelters the entrepreneur </li></ul><ul><li>… . But incubators are growing due to their special features: </li></ul><ul><li>One-stop facility to provide counsel, skills, facilities </li></ul><ul><li>Networking to mobilize services, mentoring, finance </li></ul><ul><li>Facilitation to tackle regulations, enter markets </li></ul><ul><li>Space/shared facilities at reasonable, flexible terms </li></ul>
  14. 14. Myths about incubators <ul><li>Incubation is a simple concept, easy to implement </li></ul><ul><li>The incubator is a building with shared facilities </li></ul><ul><li>Incubators make money </li></ul><ul><li>Incubators rapidly create employment </li></ul><ul><li>Incubators create dependency, as in babies & chicks </li></ul>
  15. 15. TechPark-Academia-R&D Linkage Outsourcing Strategic alliances Export of technology and of Techgoods R&D Parcels Incubator graduates/ Anchor tenants Research Institutes Private/Public Venture Capital Funds Multi-tenant Buildings Technology Business incubator Information Center Technology Park Board Management Technical University Faculty – Facilities- Students Public Policies City Govt Support Venture Capital Professional Services
  16. 16. EU Policy context: Programs and Contexts 1/3 <ul><li>The EU started supporting the development of incubators in mid1980s as part of its regional policy. Since then around 150 organizations assisted </li></ul><ul><li>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’. </li></ul><ul><li>EU programs providing assistance to incubators </li></ul><ul><li>the European Regional Development Fund (ERDF), </li></ul><ul><li>European Social Fund (ESF) </li></ul><ul><li>mainly for training, Leonardo Programme </li></ul><ul><li>Sixth R&D Framework Programme, and others </li></ul>
  17. 17. EU Policy context: Programs and Contexts 2/3 <ul><li>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. </li></ul><ul><li>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. </li></ul><ul><li>EU also supports benchmarking and best practice </li></ul>
  18. 18. EU Policy context: Programs and Contexts 3/3 <ul><li>EU-wide support networks: EBN ( European Business & Innovation Centre Network), ‘Gates to Growth’, and ‘Science Alliance’. </li></ul><ul><li>National associations: France, Germany, UK </li></ul><ul><li>Key priority: support incubator developments in the 10 new EU member states </li></ul>
  19. 19. <ul><li>New Venture Creation Process </li></ul><ul><li>Options to Support Venture Creation </li></ul><ul><li>Incubation: Characteristics, Benefits, Risks </li></ul><ul><li>Partnerships for Successful Incubation </li></ul><ul><li>EU Policy Context: Network and Programs </li></ul>