CASiS
Centre of Advanced Studies in Innovation Systems
CRITICAL ELEMENTS OF SUCCESSFUL BUSINESS INCUBATION:
APPROACH AND MODELLING
Ing. Giuseppe Cardoni
Director
Parco Tecnologico dell’Umbria - Sitech
Loc.Pentima Bassa 21, 05100 Terni
Italy
From a research by Takis Damaskopoulos – CASIS – Paris and Giuseppe Cardoni PTU-Sitech
CASiS
Centre of Advanced Studies in Innovation Systems
THE OPTIC
…for new technologies that power the knowledge economy to be able to spread
throughout the whole economy, thus enhancing innovation and productivity
growth, business firms, the institutions and culture of society, and the factors
engaged in the production process need to undergo substantial change
…the agenda of research and policy on the dynamics of adoption of new economy
practices, innovation, and economic growth needs to be expanded beyond the level
of the firm. It needs to be built around the dynamic interrelationships between
technological transformations, firms’ organisational and knowledge-creating
capabilities, emerging market and industry structures, and public institutions
CASiS
Centre of Advanced Studies in Innovation Systems
PERFORMANCE PARAMETERS OF BUSINESS INCUBATION
1.
2.
3.
4.
5.
6.
Governance and management of incubation
Enterprise development program of incubation
Marketing strategy of incubation
Physical facility and general business services
Financial model of business incubation
Technology transfer
CASiS
Centre of Advanced Studies in Innovation Systems
THE CONCEPTUAL FRAMEWORK
• What is ‘new’ in the new economy:
it is knowledge-driven
it is global
it is networked in terms of technology and organisation
•
•
•
•
•
‘Organisational capital’
Changing ‘type’ and ‘relevance’ of knowledge
The ‘network enterprise’
‘Clusters of innovation’
‘Social capital’
CASiS
Centre of Advanced Studies in Innovation Systems
HISTORICAL EVOLUTION OF BUSINESS INCUBATION
CASiS
Centre of Advanced Studies in Innovation Systems
…AND WHERE WE ARE TODAY
– acceleration and systematisation of creating successful businesses
– provision of a comprehensive and integrated range of support
– provision of services on a ‘one-stop-shop’ basis which enables overheads
to be reduced by sharing costs
– improvement of the survival and growth prospects of new start-ups
– generation of a steady flow of new businesses with above average job and
wealth creation potential
Differences in stakeholder objectives for incubators, admission and exit
criteria, the knowledge intensity of projects, and the precise configuration
of facilities and services, distinguish one type of business incubator from
another
CASiS
Centre of Advanced Studies in Innovation Systems
BUSINESS INCUBATION MODELLING
CASiS
Centre of Advanced Studies in Innovation Systems
WHICH APPROACH TO BUSINESS INCUBATION IN UMBRIA?
Approach: A global ‘economic’ approach to business that covers every aspect of a
firm
Focus:
May be high-tech, mid-tech, or low-tech or may even involve
innovations of a non-technological ‘environmental’ nature such as the
development of ‘ambient’ technology
Key: identify different enterprises and systems of knowledge and
technology at different parts of the value chain and create an
environment that maximises synergies which contribute not only to
economic growth of the companies themselves but also to the
economic growth of the region
Role:
A ‘facilitator’ or a ‘village animator’
CASiS
Centre of Advanced Studies in Innovation Systems
BUSINESS INCUBATOR MODELLING: which model?
Market model:
a general business incubator
Financial model: a not-for-profit entity with a public mission that has
a
balanced representation of regional public authorities and
private business community in its governing board
Operational model: a physical incubator model but with added non-physical
virtual elements included in its structure of service provision –
wider geographical footprint
CASiS
Centre of Advanced Studies in Innovation Systems
ELEMENTS OF A GOVERNANCE AND MANAGEMENT MODEL
– a balanced private / public representation where the local and regional
business community outnumbers that of the public sector
– a shared understanding of the mission that the incubator is to achieve
– roles and responsibilities for the governing body and the management team
that are codified as part of the incubator’s organisational policy
– a management team with demonstrated and relevant experience
– management team in a position to concentrate most of its activities to
working with the portfolio companies of the incubator
CASiS
Centre of Advanced Studies in Innovation Systems
ELEMENTS OF AN ENTERPRISE DEVELOPMENT PROGRAMME
– a mechanism to perform effective diagnoses on prospective client companies
as part of the admission process
– a full range of formal and informal to support the development of the whole
enterprise
– the provision of management development advice targeted to developing the
skills of the portfolio companies’ management team
– an effective monitoring / tracking management system which provides
systematic feedback on the effectiveness of the enterprise development
program
– a graduation process which helps portfolio companies leave the incubator
– an emphasis both on local development and international attraction of startup companies
CASiS
Centre of Advanced Studies in Innovation Systems
ELEMENTS OF A MARKETING STRATEGY
– identification of the type of companies the incubation program will target
– identification of the benefits the incubation program offers its clients
– identification of the needs of prospective clients and proactively manage
portfolio expectations through a carefully calibrated pool of service tools
tailored to the need of the clients
– development of the capacity to ‘package’ individual service propositions
according to the needs of the portfolio companies – a 360 degree view of the
client company is a must
CASiS
Centre of Advanced Studies in Innovation Systems
QUALITIES OF PHYSICAL FACILITIES
– a facility that is attractive to and compatible with the incubator’s target
market and its client’s developmental requirements
– a common social space for social integration and networking among the
client companies and the wider business community
– the facility must be consistent with the incubator’s financial model
CASiS
Centre of Advanced Studies in Innovation Systems
ELEMENTS OF A SUSTAINABLE FINANCIAL MODEL
– not be significantly tied up in facility rental, acquisition, maintenance and
suchlike expenditures
– [though the incubator might rely on public support funds in the initial phases
of its operations], it should be run as a private business in that it should be
expected to generate profit or at the very least break even - the incubator
should not be seen as a funnel that channels public funds to start-up
companies and other SMEs
– be protected from internal risk stemming from excessive reliance for
revenues on a single portfolio company. In other words, the incubator’s
portfolio must be diversified enough to mitigate financial risk
– must be protected from external risk stemming from dependence on singular
external sources of finance such as regional government economic
development programs
CASiS
Centre of Advanced Studies in Innovation Systems
ELEMENTS OF TECHNOLOGY TRANSFER
– assess the existing stage of development of the region in terms of technology
transfer mechanisms and practices – with respect to R&D quality, technology
acceptance, technology implementation, and technology application
– engage the incubator into systematic relations with local and regional
universities and research centres in order to identify key technology projects
and their commercial potential
– position the incubator as the facilitator or the main liaison mechanism that
links the originators of the intellectual property attached to particular
technologies and other actors that play a key role in the technology transfer
process
– develop informal links between the key actors involved in the whole chain of
the technology transfer process
CASiS
Centre of Advanced Studies in Innovation Systems
DESIGNING EFFECTIVE BUSINESS INCUBATION SERVICES
– develop an integrated range of services that is tailored to local needs and
offers the necessary flexibility for individual portfolio companies
– provide a guiding hand to portfolio companies, advising them on which
other means of support or service they could or should use
– proactively promote networking among the portfolio companies but also
among them and other business communities at national and
international network
– Trans-incubation: a leading trend
CASiS
Centre of Advanced Studies in Innovation Systems
BUSINESS INCUBATION SERVICES TO THE PRIVATE SECTOR
– evaluation of innovative projects and the entrepreneurs and management
teams behind them
– strategic advice and assistance in implementing business projects, by
devising suitable, high-quality business plans
– facilitating access to finance and partnerships
– helping firms to internationalise their business and find partners and
customers in markets outside their area (trans-incubation)
– organising regional inter-firm cooperation (spin-offs, grouping companies,
clustering, sub-contracting etc.). In this way business incubators help develop
local innovative ‘business communities’
– providing specific ‘entrepreneurial’ training programs
– monitoring the ongoing progress of the projects
CASiS
Centre of Advanced Studies in Innovation Systems
BUSINESS INCUBATION SERVICES TO THE PUBLIC SECTOR
– analysis of the needs of companies on behalf of the regional authorities and
other bodies that assist small innovative businesses
– implementing measures to support small businesses under regional, national
of European Union development programs
– launching schemes to stimulate entrepreneurship, detect original projects,
disseminate innovation, organising conferences and other events dedicated to
the promotion of local entrepreneurial culture etc.
– networking with the local and regional business community
CASiS
Centre of Advanced Studies in Innovation Systems
Thank You