 Developing sustainable incubators and nurturing entrepreneurial talent
Jill Sawers |
Ms Jill Sawers, Manager: Incubation of The Innovation Hub Management Company, recently attended the National Business Incubator Association's (NBIA) 16th International Conference in Toronto, Canada to gain first-hand experience of international best practice and learn from incubator managers around the world.
Hundreds of business incubation and economic development professionals from around the world attended the conference, to find out more about developing sustainable incubators and nurturing entrepreneurial talent through numerous networking venues and educational sessions.
"Business incubation programmes have become an important catalyst for the process of starting and growing companies by providing entrepreneurs with expertise, networks and other tools they need to make their ventures successful."
- Ms Dinah Atkins,
President of the NBIA |
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According to Ms Dinah Atkins, President of the NBIA, the norm in 1980 was for research findings to sit on shelves. There was little support for small and medium enterprises (SMEs), few networks, and no start-up funding. These days business incubation programmes diversify economies, commercialise technologies, create jobs and build wealth. Since 1980, incubator clients and graduates have created more than half a million jobs in North America.
The NBIA has about 1 200 members from 50 countries. It is the world's leading organisation advancing business incubation and entrepreneurship.
After the NBIA conference, Jill also attended the 11th annual conference of the Canadian Association of Business Incubators. This event succeeded the NBIA conference and provided opportunities to establish new relationships through independent discussions with a number of individuals. Visits to select incubators, as well as leaders in entrepreneurship development, were included as part of the overseas programme to maximize the learning.
Jill Sawers at the NBIA Conference in Canada, seen here with
NBIA President, Dinah Atkins and fellow Conference delegate
Mary Spaeth of Transmera AB in Sweden.
Some of the salient learning points from these Conferences and the individual discussions with leaders in entrepreneurial development include:
Innovation, knowledge and cultures
- Innovation usually happens with networks. Discrete institutions comprising an innovation system include government, research and development (R&D) policy organisations, industry and higher education institutions. Innovation systems operate at national, regional and local systems.
- The tacit component of knowledge is more difficult to extract than codified knowledge. Accessibility and geographic distance is important. Likewise, the alignment of cultures is important and geographic clustering can influence this.
Clusters and networks
- The competitive advantage of clusters includes a thick labour market, diverse specialisation, an improved capacity to innovate by access to knowledge and the stimulation of spin-offs and start-ups and the formation of business entities.
- Critical Success Factors for clusters include:
- strong, diverse and technical savvy: talent, tolerance and technology
- established pillar companies with a global reach
- strong knowledge industry (research university, government, etc)
- specialised support services law and accounting firms
- risk tolerant Venture Capital and angel investors
- entrepreneurial culture that nourishes innovation
- sustained development strategies by civic entrepreneurs and local governments, and
- local collaboration.
- It is important to form a local network, and then link with other national networks. It is also important to build networks with government, tertiary educational institutions and industries and, generally the system of innovation. Incubators can also serve as platforms for foreign companies to launch their operations in the local country.
Incubation
- Incubation funders should be seen as investors expecting a Return on Investment, rather than as a donor (in a social context). Incubators should strive to recover a portion of their costs.
Incubators
- Effective incubators have the following characteristics:
- They work with the system of innovation
- They reach and transform their communities
- They are the nexus of venture capital and government seed funds, and youth entrepreneurship programmes
- They help other incubators
- Incubators must operate at an entrepreneurial pace, while governance must operate at the same pace. Acceptance into an incubator should be a rapid process and the incubator should be able to focus on "deal-flow" rather than "education".
- Incubator best practice includes the rapid process for screening of candidates, inviting the company to make a pitch to an advisory pane comprising entrepreneurs, investors and service providers, and selecting the entrepreneur who is willing to contribute to growth of the science park.
- It is important to build support among the community for the Incubator. Mechanisms could include:
- Forming an Advisory Board comprising of intern alia service providers, lawyers, accountants, marketing professors and bankers
- Developing a professional service network and negotiate contributions and pro-bono assistance
- Recruit mentors
- Build relationships with universities
- Secure partners (corporations, universities, service providers, organizations) by exchanging value
- Performance indicators of incubators could include the following:
- Cost savings
- Acquired funding
- Capital improvements
- Numbers of companies graduating
- Number of clients served
- Taxes/revenues generated
For more information on learning from international best practice on incubation and Incubators, watch out for the next edition of NewsBits!
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