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Science parks and business incubation centres: An overview


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Science parks and business incubation centres: An overview

  1. 1. Science parks and business incubation centres: An overview Charles Monck Charles Monck & Associates 13 June 2011
  2. 2. Definition of Science Parks and Business Incubation Centres Science Parks Business Incubation Centres <ul><li>A Science Park is an organisation managed by specialised professionals , whose main aim is to increase the wealth of its community by promoting the culture of innovation and the competitiveness of its associated businesses and knowledge-based institutions. To enable these goals to be met, a Science Park: </li></ul><ul><ul><li>Stimulates and manages the flow of knowledge and technology amongst universities, R&D institutions, companies and markets </li></ul></ul><ul><ul><li>It facilitates the creation and growth of innovation-based companies through incubation and spin-off processes </li></ul></ul><ul><ul><li>It provides other value-added services together with high quality space and facilities </li></ul></ul><ul><li>Source: International Science Park Association </li></ul>Business incubation is a unique and highly flexible combination of business development processes, infrastructure and people designed to nurture new and small businesses by helping them to survive and grow through the difficult and vulnerable early stages of development” Source: UK Business Incubation What are Science Parks and Business Incubation Centres?
  3. 3. Wainova Directory of 433 Science Parks Profile of World Science Parks World Location of SPs % Age of Science Parks Size of Firms % Origin of Firms %
  4. 4. University of Warwick Science Park – founded in 1984 Example of a Successful Science Park Location 25 yr Phased Development Results Partners Staff and Funding <ul><ul><li>18 buildings – 38,000 sq m </li></ul></ul><ul><ul><li>4 incubators – 14,000 sq m </li></ul></ul><ul><ul><li>Currently 130 tenants </li></ul></ul><ul><ul><li>Total through Park > 250 firms 700 firms supported by Park </li></ul></ul><ul><ul><li>Coventry City (pop 300,000) 50 km from Birmingham </li></ul></ul><ul><ul><li>17 ha outer city location, adjacent to Warwick University (Bachelors 12,000 Masters/PhD 4,600, academic staff 1,700) </li></ul></ul><ul><ul><li>84-89 Buildings and client base </li></ul></ul><ul><ul><li>88-96 Business support services </li></ul></ul><ul><ul><li>96-00 3 feeder incubation centres </li></ul></ul><ul><ul><li>00- Development of technology corridor and support of clusters </li></ul></ul><ul><ul><li>Founders: University of Warwick (37%) and Coventry City Council (47%) + 2 others (18%) </li></ul></ul><ul><ul><li>Project support from the Regional Development Agency </li></ul></ul><ul><ul><li>At outset 4 staff. Now 16 property and 16 business support </li></ul></ul><ul><ul><li>Turnover of Park £7m </li></ul></ul><ul><ul><li>Profit before tax £400k </li></ul></ul><ul><ul><li>Fixed assets £25m (loans £2m) </li></ul></ul>1 2 3 4 5
  5. 5. Sources of demand and implications for the Science Park – the importance of entry criteria Markets serviced by Science Parks and Incubation Centres Sources of demand Implications for Science Park <ul><li>1. Start ups </li></ul><ul><li>Spin outs from Universities and research institutes (RIs) </li></ul><ul><li>Local entrepreneurs </li></ul><ul><li>Incubation space and shared services </li></ul><ul><li>Pre-incubation support </li></ul><ul><li>Work with Commercialisation Offices in University and research Institutes </li></ul><ul><li>2. Established technology based firms </li></ul><ul><li>Expansion of start ups </li></ul><ul><li>Relocation of local and regional firms requiring more space and better environment </li></ul><ul><li>Grow on space (for rent) </li></ul><ul><li>Brand and image of Science Park </li></ul><ul><li>Quality of working environment </li></ul><ul><li>Links with Universities and RIs </li></ul><ul><li>Science Park support services </li></ul><ul><li>3. Attraction of national and foreign investors </li></ul><ul><li>National companies needing to establish a new business unit </li></ul><ul><li>Foreign investors </li></ul><ul><li>Serviced plots and larger premises </li></ul><ul><li>Strong Image and profile </li></ul><ul><li>Links with Invest in Columbia </li></ul><ul><li>Relevant incentives </li></ul>
  6. 6. UKSPA analysis: distribution of occupants by sector
  7. 7. UKSPA analysis: previous location of occupants
  8. 8. UKSPA analysis -company size (number of employees)
  9. 9. UKSPA analysis: occupants by size of premises (sq m)
  10. 10. Science Parks are shaped by three key components + funding <ul><li>PEOPLE </li></ul><ul><li>Board and strategy </li></ul><ul><li>Director and staff of SP </li></ul><ul><li>Marketing and brand </li></ul><ul><li>Tenant companies </li></ul><ul><li>PLACE </li></ul><ul><li>Location and land </li></ul><ul><li>Environment and design </li></ul><ul><li>Terms of occupancy </li></ul><ul><li>Sources of funding </li></ul><ul><li>PARTNERSHIPS </li></ul><ul><li>Universities/research </li></ul><ul><li>Government </li></ul><ul><li>Suppliers and customers </li></ul><ul><li>Financial sector </li></ul><ul><li>FINANCIAL SUSTAINABILITY </li></ul><ul><li>Investment for land & buildings </li></ul><ul><li>Funding of incubator </li></ul><ul><li>Income for operations </li></ul><ul><li>Funding of business support </li></ul>Key drivers of success of Science Parks People Places Partnerships Financial sustainability Critical Success Factors in the Development of Science Parks
  11. 11. The best science parks have dynamic Boards, a well connected Director, high calibre staff, tenant firms run by strongly motivated CEOs and a strong brand 1 People ON SITE SUPPORT TEAM STAFF IN TENANTS FIRMS STRATEGY and VISION STRENGTH OF BRAND <ul><ul><li>Strong Board committed to continuous improvement </li></ul></ul><ul><ul><li>Clear long term vision and defined objectives </li></ul></ul><ul><ul><li>Capacity to identify and overcome barriers to development </li></ul></ul><ul><ul><li>Identity of University and City </li></ul></ul><ul><ul><li>Image, profile and reputation </li></ul></ul><ul><ul><ul><ul><ul><li>Quality of local, national and international networks </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Regular promotion of successes </li></ul></ul></ul></ul></ul><ul><ul><li>Calibre, skills and personality of the Director </li></ul></ul><ul><ul><li>Able to understand and address the business needs of tenants </li></ul></ul><ul><ul><li>Capacity of team to create external networks </li></ul></ul><ul><ul><li>Quality housekeeping services </li></ul></ul><ul><ul><ul><ul><ul><li>Success of tenant firms </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Creation of effective networks </li></ul></ul></ul></ul></ul><ul><ul><li>CEOs and staff identify with aspirations of Park </li></ul></ul><ul><ul><li>Initial selection of tenant firms </li></ul></ul>Marketing and Brand Board and Strategy The Tenants Director and Staff of SP
  12. 12. Linkages among stakeholders assist in commercialising research, growing profitable businesses and supporting clusters 2 Partnerships Partnerships: How Science Parks support cluster development z BUSINESS DEVELOPMENT Universities/Research STRENGTHEN Government Suppliers and Customers Financial Sector Engineering & Materials Technology Consultancy Electronics, & IT Business Services STRENGTHEN STRENGTHEN STRENGTHEN Bio Sciences
  13. 13. Location, land and buildings to support the process of creativity, innovation and entrepreneurship through interactions 3 Place TERMS OF OCCUPATION SOURCES OF FUNDING LOCATION AND LAND ENVIRONMENT AND DESIGN <ul><ul><li>Ease of access </li></ul></ul><ul><ul><li>Inner city, periphery or rural location </li></ul></ul><ul><ul><li>Proximity to University </li></ul></ul><ul><ul><li>Land area and ownership of land </li></ul></ul><ul><ul><li>Masterplan and landscaping </li></ul></ul><ul><ul><li>Quality of buildings </li></ul></ul><ul><ul><ul><ul><ul><li>Mix of incubation units, grow and large plots </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Development ahead of uptake </li></ul></ul></ul></ul></ul><ul><ul><li>Entry criteria (and restrictions) </li></ul></ul><ul><ul><li>Easy in easy out terms </li></ul></ul><ul><ul><li>Competitive rents </li></ul></ul><ul><ul><li>Access to common and shared services (cafés, meeting rooms, ICT services, security etc </li></ul></ul><ul><ul><ul><ul><ul><li>Owner occupiers </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Property investor/developers </li></ul></ul></ul></ul></ul><ul><ul><li>Role of publicly owned corporations adopting a long term view </li></ul></ul><ul><ul><li>Public sector grants due to impact of Science Parks on local economy </li></ul></ul>Design Location & Land Sources of Funding Rent and Lease Terms
  14. 14. Financial plan to create a financially sustainable operation with the capacity to grow over time 4 Financial Sustainability Funding incubator and grow on space Funding for business and technology support Investment – capital to cover the setting up and growth of the Science Park: Operations – income from rents and service charges to cover: 1 3 2 4 Objectives: Secure tenants to cover operational costs Balance property and business objectives Build up balance sheet to fund capital programme <ul><ul><li>Land purchase and initial investment in roads, services and landscaping to create serviced plots </li></ul></ul><ul><ul><li>Initial investment in the first set of buildings </li></ul></ul><ul><ul><li>On going development </li></ul></ul><ul><ul><li>Overall direction, and control functions </li></ul></ul><ul><ul><li>Planning, project management </li></ul></ul><ul><ul><ul><ul><ul><li>On-going marketing </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Facilities and estate management </li></ul></ul></ul></ul></ul><ul><ul><li>Incubation building with common areas for shared services </li></ul></ul><ul><ul><li>Funding the growth of the incubation centre, grow-on space, and specialist facilities </li></ul></ul><ul><ul><li>Income to cover the cost of business support team </li></ul></ul><ul><ul><li>Funding for incubation and other specialist services </li></ul></ul>
  15. 15. Overall aim: Growth in the number and output of knowledge based firms Impact of Science Parks and Business Incubation Centres Start Ups Indigenous Firms Inward Investment University/ Research Institute Occupants External Funders <ul><ul><li>Commercialisation of research </li></ul></ul><ul><ul><li>Collaborative research </li></ul></ul><ul><ul><li>Retention of graduates in area </li></ul></ul><ul><ul><li>Utilisation of facilities </li></ul></ul><ul><ul><li>New links, projects and research opportunities for staff, and students </li></ul></ul><ul><ul><li>Additional research income </li></ul></ul><ul><ul><li>Supporting local economy </li></ul></ul><ul><li>Clustering benefits leading to: </li></ul><ul><ul><li>New product development </li></ul></ul><ul><ul><li>Market growth </li></ul></ul><ul><ul><li>Attraction and retention of graduate staff </li></ul></ul><ul><ul><li>Securing additional investment </li></ul></ul><ul><ul><li>Enhanced profile </li></ul></ul><ul><li>Public Funds </li></ul><ul><ul><li>Additional GVA in region </li></ul></ul><ul><ul><li>Additional jobs </li></ul></ul><ul><ul><li>Leadership in innovation </li></ul></ul><ul><ul><li>Increased R & D spend </li></ul></ul><ul><ul><li>New products developed </li></ul></ul><ul><li>Private Funds </li></ul><ul><ul><li>Return on capital </li></ul></ul><ul><ul><li>Developers profit </li></ul></ul><ul><ul><li>Long term rental growth </li></ul></ul><ul><ul><li>Image of promotion </li></ul></ul>
  16. 16. <ul><li>Context ; understanding the policy, economic, market, technological and institutional context of the Science Park </li></ul><ul><li>Vision and objectives of each of the partners and the Science Park as a whole </li></ul><ul><li>Market: understanding and validating the market for the Science Park and the characteristics of demand from spin outs/start ups, expansion of local firms and relocations from other parts of the country and abroad, competing locations and what would attract them to the Science Park. Determine specification of first buildings (sizes and type of facilities) </li></ul><ul><li>Investment plan for the site and premises based on outline masterplan and cost estimates for servicing the site and constructing premises + sources of funding </li></ul><ul><li>Operational plan for the Science Park – legal structure and governance, Science Park Director and staffing, marketing, entry criteria, rental terms, facilities management, provision of shared and business support services </li></ul><ul><li>Financial plan for the Science Park – cash flow, funding sources and risk analysis </li></ul><ul><li>Implementation Plan – what actions by whom and when </li></ul>Market assessment and business planning for Science Park