Unique solutions for SME environments discussed at World Conference in Australia

Sue Bell (left), Director of Innovation and Knowledge Transfer at LaTrobe University in Australia and Prime Minister of Technology Parks and Incubators of Australia, also runs the La Trobe University R&D Park, with Jill Sawers at the Park.

Representing The Innovation Hub's Maxum Business Incubator at the International Council of Small Business (ICSB) Annual Conference held in Melbourne in June 2006 this year, Manager Jill Sawers delivered a paper on "How SMEs can guard against opportunism by large companies".

Attended by approximately 340 delegates, the focus of the discussions at the Conference was on finding unique solutions for the unique environments in which start-up companies have to operate.

SMEs considering partnerships with large companies should therefore have core abilities and capabilities to develop awareness and ensure that safeguards, specifically formal safeguards are in place.

Interesting insights also came from the Minister of the Victorian Government in Australia, who in his welcome address highlighted measurements that had been put in place to assist small companies. These included the establishment of a Small Business Commission to resolve business disputes out of court and a Fair Payments Policy that compels government departments to pay SMEs for services rendered within 30 days or face penalties with the intention to roll this out to all government departments and the private sector.

In addition, a red tape reduction policy ensure that each new "red tape" is counter-balanced with measures to simultaneously reduce the red tape, while a single point of entry for accessing bureaucratic processes is helping to reduce the turn-around time for entrepreneurs.

Allan Gibb, Professor Emeritus of Durham University in the United Kingdom, in his presentation on "Entrepreneurship: Unique Solutions for Unique Environments?" called for a new way of studying entrepreneurship - that instead of the approach of "dissecting it to death", a holistic approach was required. He defined entrepreneurship as "the personal, organisational and community capacity to cope with, create and enjoy uncertainty and complexity".

He emphasised that entrepreneurship was not confined to business but could apply to all areas, including government and that students need to be exposed to the complexities of real life situations. The focus should be on learning to cope with uncertainty and complexity and understanding the value of and how to develop trust-based relationships.

In Finland the government plays a very important part in the life of a start-up companies, according to Ulla Hytti, and Katja Maki of the Turku School of Economics. There are more than 100 incubators - 23 of them technology incubators - are all not-for-profit and fully subsidised by government grants.

Sue Bell, the Director of Innovation and Knowledge Transfer at LaTrobe University, who also runs the La Trobe University R&D Park and is the Prime Minister of Technology Parks and Incubators of Australia, cited the YAA programme as an example of an innovation programme, which is a substantial focus at the Park. Fifteen postgraduates (masters and PhD) are grouped to form a company and are required to develop and build a business within 26 weeks. They appoint their own directors and managers, raise capital, issue shares to shareholders (250 shares at AUD 2 per share) and at the end of the programme are expected to distribute a dividend to the shareholders. According to Bell, this exposure to "real business" gives the students a competitive edge when applying for jobs.

En route to the Conference in Australia, Sawers visited the iAxil Incubator and EDP Science Park in Singapore to establish relationships through which to "open the doors" for South African companies at the Maxum Business Incubator who wish to expand into the Indian, Chinese or Australian markets.

As a country, Singapore has differentiated itself from other countries such as India and China by shifting its focus from investment to creating an innovation driven economy, where the emphasis is on innovation and enterprise development.

The country has three Science Parks and environment for start-ups is relatively friendly and the legislation lenient. A company with a turnover of < $10 million does not need to submit audited statements and there are several sources of funds for start-ups. This includes a matching government fund of up to $160 000 for technology based businesses, government grants for the pilot testing of new products and services, and an active angel investor group.

The iAxil Incubator is part of the Ascendas group of Science Parks that originated in Singapore and now have Science Parks in Singapore, China (6 parks), the Philippines (1 park), India (4 parks), Japan (1 park) and Korea (1 park).

The EDP, established 45 years ago before Singapore became independent in 1965, focuses on inward investment via multinational companies, and on innovation and enterprise development. It runs the 1:1 matching funds programme for SMEs with a five-year $700 000 fund to set up incubators, foreign and local, with a 33% investment in foreign SMEs.

Contact Jill Sawers at (012) 844 0031 for details about the Maxum Business Incubator at The Innovation Hub.

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