BUSINESS INCUBATION IN TRINIDAD AND TOBAGO May 24, 2011
MINISTRY OF LABOUR AND SMALL AND MICRO
ENTERPRISE DEVELOPMENT
Tower C, International Waterfront Centre,
#1 Wrightson Road, Port-of-Spain, Trinidad and Tobago
Telephone No: (868) 625-8478; Fax: 624-4091; Website: http://www.labour.gov.tt
Enterprise Development Division
ENTERPRISE DEVELOPMENT THROUGH
BUSINESS INCUBATION
DRAFT POLICY DOCUMENT
Entrepreneurship creates value
For Consultation Purposes Only
1
Ministry of Labour and Small and Micro Enterprise Development | Enterprise Development Division
BUSINESS INCUBATION IN TRINIDAD AND TOBAGO May 24, 2011
Contents
Acknowledgement .............................................................................................................................2
Definitions .........................................................................................................................................3
Entrepreneurship ...................................................................................................................................... 3
Entrepreneur............................................................................................................................................. 3
Innovation ................................................................................................................................................. 3
Business Incubation .................................................................................................................................. 3
Executive Summary............................................................................................................................4
Purpose .............................................................................................................................................5
Context..............................................................................................................................................5
Guiding Principles ..............................................................................................................................6
BUSINESS INCUBATOR POLICY COMPONENTS .....................................................................................7
Ministry Focus and Roles ........................................................................................................................ 10
Collaboration and Channels (Stakeholder Involvement) ........................................................................ 11
Business Incubation Framework ............................................................................................................. 12
Return on Investment ............................................................................................................................. 15
Client/Project Selection .......................................................................................................................... 15
Intellectual Property ............................................................................................................................... 16
Exits and Terminations............................................................................................................................ 16
Alliances and Integration ........................................................................................................................ 16
The Incubation Program Operations Systems ........................................................................................ 17
Monitoring and Evaluation ............................................................................................................... 17
Conclusion ....................................................................................................................................... 18
Acknowledgement
This Draft Policy on Enterprise Development Through Business Incubation document is the culmination of the efforts of several
dedicated individuals, and special thanks to Messrs. Sunil Tyagi and Rajan Trehan of the National Small Industries Corporation
of India.
Ministry of Labour and Small and Micro Enterprise Development | Enterprise Development Division
2
BUSINESS INCUBATION IN TRINIDAD AND TOBAGO May 24, 2011
Definitions
Entrepreneurship
Entrepreneurship is a process through which individuals identify opportunities, allocate resources, and create
value. This creation of value is often through the identification of unmet needs or through the identification of
1
opportunities for change ( ).
Entrepreneur
A person who exercises initiative by organizing a venture to take benefit of an opportunity and, as the decision
maker, decides what, how, and how much of a good or service will be produced. He or she supplies risk capital as a
risk-taker, and monitors and controls the business' activities as a manager. The entrepreneur is usually a soleproprietor, a partner, or the one who owns the majority of shares in an incorporated venture. Entrepreneurs are
not necessarily motivated by profit but regard it as a standard for measuring achievement or success. They greatly
value self-reliance, strive for distinction through excellence, are highly optimistic (otherwise nothing would be
2
undertaken), and always favour challenges of medium risk (neither too easy, nor ruinous). ( )
Innovation
A process by which an idea or invention is translated into a good or service for which people will pay. To be called
an innovation, an idea must be replicable at an economical cost and must satisfy a specific need. Innovation
involves deliberate application of information, imagination, and initiative in deriving greater or different value
from resources, and encompasses all processes by which new ideas are generated and converted into useful
products. In business, innovation results often from the application of a scientific or technical idea in decreasing
the gap between the needs or expectations of the customers and the performance of a firm's products. In a social
context, innovation is equally important in devising new collaborative methods such as alliance creation, joint
venturing, flexible working hours, and in creating buyers' purchasing power through methods such as hire
3
purchase ( ).It may be evolutionary (long-term stepwise improvements), revolutionary (a completely new
disruptive product or service) or adaptive (customising existing products and services to better suit a particular
4
need in a different geographic location e.g. a small country versus a big country). ( )
Business Incubation
"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
5
difficult and vulnerable early stages of development." ( )
Micro and Small Enterprise (MSE)
Enterprises with less than 25 employees, assets of $1.5 Million or less (excluding land and building) and revenue of
$5 Million or less.
1
http://www.gregwatson.com/entrepreneurship-definition/
http://www.businessdictionary.com/definition/entrepreneur.html
3
http://www.businessdictionary.com/definition/innovation.html
4
NEXT archives.
5
http://www.diogenes.com.cy/incubation/definition.html
2
Ministry of Labour and Small and Micro Enterprise Development | Enterprise Development Division
3
BUSINESS INCUBATION IN TRINIDAD AND TOBAGO May 24, 2011
Executive Summary
The goal of the policy is to outline the process that will be used to establish business incubators that will
generate revenue of TT$1 Billion annually by 2015. The policy aims at supporting:
1. The sector niches that offer T&T real opportunities to create value and develop businesses that
have strong long term growth prospects with markets beyond the CARICOM region.
2. The development of new products and services as well as new processes and marketing
networks through the use of local knowledge, talent and resources.
3. The development of self employment opportunities by exploiting local and regional markets.
This will be accomplished through the Ministry playing a coordinating role and establishing alliances
with all stakeholders that provide services in the Business Incubator Programme in all the areas of
competence, including:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Business counseling and Mentoring
Entrepreneurship Orientation
Equipment training (where applicable)
Market Research
Business Plan preparation
Business approvals and processes
Management coaching
Research and Development
Funding
These services will be provided through publicly funded institutions or through public/private
partnerships as well as enterprise/university partnerships. The private sector will also be encouraged to
participate by investing and supporting emerging entrepreneurs. The partnerships will identify
Government’s role as a facilitator and provider of key resources (primarily physical and financial) and
training.
The clients will be divided into two categories: the “For Profit” projects where profits are anticipated in
the immediate to very near future and have the potential to grow; and the “Not for Profit” projects that
focuses on community development and encourages entrepreneurship at that level.
Every project that receives support in the Business Incubator should provide a satisfactory return either
economically or socially, i.e.
a. All funds invested are repaid with a satisfactory premium.
b. The stated and agreed social objectives have been achieved.
4
Ministry of Labour and Small and Micro Enterprise Development | Enterprise Development Division
BUSINESS INCUBATION IN TRINIDAD AND TOBAGO May 24, 2011
Purpose
To develop a comprehensive nurturing environment that utilizes best practice to support the
development of new entrepreneurial and innovative micro and small businesses.
Context
Global experiences of micro and small enterprises (MSEs) have shown that failure rates of MSEs are
highest during their first five years of existence. The following factors rank high among the causes of
business failures:
i.
Lack of finance or inadequate financial structure
ii.
Absence of or inadequate infrastructure
iii.
Ineffective or inefficient business and management practices
iv.
Limited networks for marketing, and operational and technical support.
There are many opportunities for the creation of micro and small enterprises to develop new products
and services to cater not only to local needs, but also to export these products and services regionally
and internationally. However, it is necessary to provide the support to MSEs in the aforementioned
areas in order to improve their chances of long term viability and competitiveness.
Accordingly, the Ministry of Labour and Small and Micro Enterprise Development is leading the
initiative for the development of business incubators throughout Trinidad and Tobago, specifically
targeting businesses in the MSE sector.
POTENTIAL OPPORTUNITIES
Raw Materials
The country has sufficient resources of minerals, agricultural and related products; however, there are
very few small enterprises which could consume the local available raw materials and available labour
for production of consumable goods. Most of the items are being imported. Local manufacturing
companies have opportunities to increase their output using local resources.
Ministry of Labour and Small and Micro Enterprise Development | Enterprise Development Division
5
BUSINESS INCUBATION IN TRINIDAD AND TOBAGO May 24, 2011
Human Resource
The country continues to be affected by unemployment, underemployment and poverty. Also, the
relatively high levels of social displacement from these factors may partly account for the unusually high
level of crime in the country, and inclusion of programmes to target the unskilled and displaced workers
may be necessary.
At present, there are a few training institutions in Trinidad and Tobago engaged in imparting skills to
youths and prospective entrepreneurs. At the tertiary level, all four major universities offer formal
training in entrepreneurship courses, with post-graduate studies available. Non-tertiary level
entrepreneurial training is also available through Youth Training Employment Partnership Programme,
National Entrepreneurship Development Company Limited, Metal Industries Company and several other
bodies for interested persons. However, there is limited monitoring and evaluation to determine how
successful these programmes were in converting training into an entrepreneurial endeavour. In addition
to this, there is increasing unemployment and underemployment, thus suggesting that these
programmes need to be strengthened to ensure that they have an impact on these social factors.
Financial Conditions
Trinidad and Tobago has been awash with liquidity since 2004. Excess liquidity amounted to more than
TT$ 2 billion towards the close of 2010, and interest rates have continued to decline. The financing for
MSEs is therefore available and the investing public is eager for diversified investment opportunities
that meet or exceed prevailing market returns.
Guiding Principles
National Pillars
The Policy is designed to be aligned with the national framework for sustainable development
developed by the Government of the Republic of Trinidad & Tobago (GORTT) which is based on seven
interconnected pillars:
Pillar 1: People-Centred Development – We Need Everyone and All Can Contribute: The programme is
focused on empowering residents to become self employed.
Pillar 2: Poverty Eradication and Social Justice – Preference for Poor and Disadvantaged: The programme
seeks to reduce poverty by improving technical and business skills levels
Ministry of Labour and Small and Micro Enterprise Development | Enterprise Development Division
6
BUSINESS INCUBATION IN TRINIDAD AND TOBAGO May 24, 2011
Pillar 4: Information and Communication Technologies – Using ICT to improve the efficiency of the
businesses and improve networking and communication capabilities
Pillar 5: A More Diversified, Knowledge Intensive Economy – Creating additional business opportunities
that will ultimately ensure economy diversification.
Programme Principles
1. Facilitate and support the expansion of the programme through alliances with stakeholder
partners from the public, private and NGO sectors to advance enterprise development for MSEs.
2. Differentiate the strategic approaches depending on the level of development of the MSE
3. Ensure that the programme focuses on skills development, operational support, financing and
training for MSEs
4. Use direct and virtual approaches to provide services to MSEs
5. Ensure that client selection and graduation policies are consistent with the goals identified and
that international best practices are adopted.
6. Comply with labour laws and operate within the framework established by the Decent Work
Agenda for wealth creation and employment generation.
This Policy Document provides a framework and approach for implementing the stated purpose.
BUSINESS INCUBATOR POLICY COMPONENTS
The purpose of the Business Incubation Policy for Enterprise Development is to develop a
comprehensive, best practice, nurturing environment to support the development of new
entrepreneurial and innovative businesses. This will be achieved through the transformation of ideas
into high value creating businesses derived from the indigenous resources and talents available in
Trinidad and Tobago. It will also lead to direct and indirect job creation and community development in
sectors and sub-sectors that have the potential to diversify the economic base of Trinidad and Tobago.
There has already been a considerable amount of work done to identify growth opportunity areas within
T&T that can be developed around the resource base and capabilities that are already in place, or which
could realistically be put in place. This includes seven sector ‘Best Bets’ projects completed by NIHERST
in recent years (Fashion, Creative, Renewable Energy, Niche Manufacturing, Niche Tourism, Food and
Beverage, Biotechnology) as well as several completed by e-TecK (ICTs and Health and Wellness).
It will also ensure that there is a priority focus towards supporting people who have an expressed desire
to enter into a business activity. Such support will be dependent upon a formal assessment process that
has been used with success in practice in small country business incubation processes.
A summary of the Policy Components are provided in Figure 1 below.
Ministry of Labour and Small and Micro Enterprise Development | Enterprise Development Division
7
BUSINESS INCUBATION IN TRINIDAD AND TOBAGO May 24, 2011
National Vision
The policy purpose needs to be seen within the context of a national vision in order for its purpose to be
clearly understood and stated. The GORTT has stated that its long-term goal is to progress Trinidad and
Tobago to the point where it becomes an ‘advanced economy’. This means that the economy will need
to be embrace a greater number of higher value generating businesses in those areas where the country
has a natural resource base (physical, capital and intellectual) and which are aligned with international
niche market opportunity areas that have been identified as offering long term growth potential to
entrepreneurial and innovative businesses.
Such a policy will be harmonized within the country’s National Competitiveness and Innovation Policies
to be developed by the Council on Innovation and Competitiveness.
Figure 1: A schematic overview of the policy components.
8
Ministry of Labour and Small and Micro Enterprise Development | Enterprise Development Division
BUSINESS INCUBATION IN TRINIDAD AND TOBAGO May 24, 2011
Business Incubator Vision
The GORTT vision to become an advanced economy is the lead long-term vision. The policy will seek to
provide the support to:
1. The sector niches that offer T&T real opportunities to create value and develop businesses that
have strong long term growth prospects that focuses on international markets and capitalizes on
opportunities created through our international agreements (i.e. COMPETITIVENESS).
2. The development of new products and services as well as new processes and marketing
networks through the use of local knowledge, talent and resources (i.e. INNOVATION).
3. The development of self employment opportunities by exploiting local and regional markets (i.e.
ENTERPRISE DEVELOPMENT).
Additionally, the policy will seek to channel the relevant public sector resources towards facilitating
growth and development of those sectors with strong growth potential.
This then supports what is termed the ‘Growth and Innovation Engine’ which is the key focus area of this
Policy. In the context of this Policy document, this ‘Engine’ embraces the following components:

Capability enhancers – skills acquisition and training, infrastructure, access to resources etc. This
includes educational and academic institutions, private training centres, social programs and
streamlining business registration, operating and reporting processes.
Business Development Agencies – any parties involved in supporting business development in
any way in the public, private and NGO sectors.
Research and Development – this can come be related to any stakeholder group and is an
essential part of value creation – whether initiated and completed by an entrepreneur or
developed by or in conjunction with an R&D agency.


For such a system to function effectively, it requires a high level of collaboration between key
stakeholders at all levels. Towards this end, the Ministry will seek to establish alliances with all
stakeholders that provide services in the Business Incubator Programme in all the areas of competence,
including:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Business counseling and Mentoring
Entrepreneurship Orientation
Equipment training (where applicable)
Market Research
Business Plan preparation
Business approvals and processes
Management coaching
Research and Development
Funding
Ministry of Labour and Small and Micro Enterprise Development | Enterprise Development Division
9
BUSINESS INCUBATION IN TRINIDAD AND TOBAGO May 24, 2011
The end-result is the provision of a best practice nurturing environment that support the development
of new entrepreneurial and innovative businesses, creates new, more rewarding and more meaningful
employment opportunities, strengthens the basis of communities and leads to diversification of the T&T
upon the basis stated in the Purpose that prefaces this Policy document.
Policy Goals and Targets
1. To establish business incubators by August 2011 and continue to encourage the use of the
model in the ensuing years. These will comprise various types of structures using public,
public/private and university/enterprise vehicles.
2. To generate $1 Billion in annual revenues from existing clients in and graduates from the
business incubator programme by September 2015.
Policy Objectives
1.
2.
3.
4.
5.
Provide a clear roadmap for micro and small enterprise (MSE) creation and development.
Provide ongoing operational and management support to selected MSEs.
Create a more conducive environment for self employment.
Accelerate the development of new entrepreneurs.
Encourage alliances and collaboration among key stakeholders in the public and private sectors
to develop a comprehensive nurturing environment.
6. Support the use of innovation and competitive strategies that encourages the use of local
resources including raw materials to develop new products and processes.
These goals and objectives are intended to address the gaps in the business development process for
the MSE sector. These will be achieved through public, public/private, Government/University and
Enterprise/University partnerships. There will also be opportunities for private enterprises to create
their own models that will achieve the same goals and targets indicated in the policy. In light of these
aims, it should be understood that all incubators are expected to be financially sustainable within the
medium term.
Ministry Focus and Roles
A number of key Ministries, Agencies and Stakeholder Groups will all need to play a role in the
implementation of this Policy. To ensure effective implementation, an organizational structure designed
to ensure the widest levels of participation and partnering and to ensure that this “Business Incubation
Policy for Enterprise Development” delivers the best possible outcomes for the citizens of Trinidad and
Tobago.
Although the Ministry has the responsibility for the development and rollout of the Programme, the
National Entrepreneurship Development Company (NEDCO) will be the Ministry’s lead agency in
implementing this Programme when it is fully operational.
Ministry of Labour and Small and Micro Enterprise Development | Enterprise Development Division
10
BUSINESS INCUBATION IN TRINIDAD AND TOBAGO May 24, 2011
Collaboration and Channels (Stakeholder Involvement)
The Ministry will facilitate the process to ensure the success of this policy rather than necessarily
become involved in hands-on management of all the associated initiatives and programs. To this end
the policy will focus on encouraging collaboration and partnerships between key stakeholder groups in
both the public and private sectors to ensure the best outcomes can be achieved from its
implementation (see Figure 2).
Figure 2: Proposed organizational structure for the Enterprise Development Through Business
Incubation Policy
The Ministry will be the repository of all the resources, so that any current or aspiring MSE will be able
to receive advice on the agencies with which they will need to interact in order to establish and
successfully operate their business. In addition to these agencies, the incubator will provide day to day
operational support to the micro and small enterprises.
In this regard the Ministry will formulate both the short and longer term strategic planning components
needed to implement the National Business Incubation policy in consultation with key stakeholders. The
policy will also support the setting up and operation of public/private partnerships for all the business
incubation activities and examine ways in which social programs can be made more relevant and deliver
better results than is currently the case, through partnerships and alliances wherever practical.
Ministry of Labour and Small and Micro Enterprise Development | Enterprise Development Division
11
BUSINESS INCUBATION IN TRINIDAD AND TOBAGO May 24, 2011
It will also set the guidelines and criteria, in association with key stakeholders, to ensure that
implementation of the National Business Incubation Policy delivers the expected outcomes.
Business Incubation Framework
The approach for the Business Incubators will vary depending on their purpose. For this reason the
Policy seeks to separate the ‘For Profit’ and ‘Not For Profit’ programs and initiatives to deliver its stated
purpose. In both instances, however, prospective entrepreneurs will undergo a pre-incubation period
that focus on sustainability and readiness.
Business Incubation Activities ‘For Profit’
The ‘For Profit’ business incubation component in this Policy is focused totally towards delivering
international best practice levels of successful business establishments and ongoing success as
measured in terms of both economic and social contributions.
Figure 3: The ‘For Profit’ components of the Policy
Commercial Business Incubator
The ‘Commercial Business Incubation’ entities will specifically support those entrepreneurs who
demonstrate the potential to move through to the medium and large category within a relatively short
time frame (5 years and less) and, in some instances, may be candidates who are already in business and
who may, with the right assistance, be able to grow significantly. Most entrepreneurs in this type of
incubator will have the potential to generate significant revenue streams based upon high value
propositions that generate real benefits for T&T economically.
Social Business Incubator
The Social Business Incubator entities will be for those entities with an idea and an assessed potential
capability to deliver the idea but within a different support framework and operating under a less
ambitious set of criteria than for the Commercial Business Incubation entities. Both types of incubators
will use the same operational model but the operational criteria will differ between them.
Ministry of Labour and Small and Micro Enterprise Development | Enterprise Development Division
12
BUSINESS INCUBATION IN TRINIDAD AND TOBAGO May 24, 2011
This Policy will facilitate and contribute resources and support to these entities by the MLSMED through
collaborative partnerships (particularly public-private-partnerships), contractual arrangements or some
other form of mutually beneficial arrangement.
Under this Policy it is envisaged that these types of business incubators will become fully sustainable
within a defined time frame, generally within 5-10 years based upon international small country
experience and best practice. Such sustainability will largely be achieved from the successes each
incubator generates through the clients it supports. Financial sustainability will be achieved from a range
of sources including the payment of accrued expenses, equity share disposal and other ‘paybacks’ from
successful graduate businesses, ‘pay-to-attend’ activities, as well as ongoing private sector and public
sector contributions as deemed appropriate.
Social Programs ‘Not for Profit’
From the community perspective, the Policy also needs to address empowering individuals from
disadvantaged communities and environments so that they will also be provided with an opportunity to
achieve their personal aspirations and make a more meaningful contribution to the country and their
communities. This requires the Policy to provide ‘Not For Profit’ initiatives and programs to support the
development of such personal empowerment in areas such as those illustrated in Figure 4.
Figure 4: The ‘Not For Profit’ components of the Policy
The components shown in Figure 4 are a completely separate group of initiatives to those described in
the ‘For Profit’ section as are directed primarily at the least advantaged in society. It will help them
develop basic skills in a range of areas that are essential if they are to become positive contributors
towards the country’s long-term vision.
These programs will likely include specific focus areas such as self-esteem building, skills training,
learning how to use ICTs, basic business skills, life skills and confidence building. It has two components
as both are interconnected and necessary to deliver constructive and positive outcomes. The ‘Not For
Profit’ area needs highly motivated social entrepreneurs and innovators with a strong social conscience
in order to be able to assist with implementing effective programs and outcomes in the ‘Skills, training’
area.
Ministry of Labour and Small and Micro Enterprise Development | Enterprise Development Division
13
BUSINESS INCUBATION IN TRINIDAD AND TOBAGO May 24, 2011
Under this Policy it is envisaged that these programs will lead to a significant number of participants
developing the necessary levels of confidence and skills that will enable them to progress into the ‘For
Profit’ business incubation processes, as illustrated in Figure 5.
Social Entrepreneurs
This module seeks to identify those entities that engage in any of the social goals identified while at the
same time pursue the entrepreneurial approach to creating successful businesses. It is shaped by the
programme presently being used in India by the National Small Industries Corporation (NSIC) and will
incorporate most of the concepts. We will continue to have a relationship with the NSIC and receive the
appropriate support and training to provide comprehensive skill development training and package of
services in the areas of training for entrepreneurial skill development, selection of projects, preparation
of project profile/reports, identification and sourcing of plant, machinery and equipments, facilitating
sanction of credit facility and providing the support services in order to boost the development of micro
and small enterprises in manufacturing and services sector. NSIC will also continue to provide technical
assistance in support of this initiative.
Skills Training
This is a fourth component that is critical to the success of the programme. The Ministry will provide
counseling and support through the Business Incubators to guide sole traders or businesses to the
appropriate training institutions to improve their skills in identified areas of deficiency. Following this
exercise, these business entities will be linked to the appropriate institutions that will be able to help
them prepare for entrance into an incubator programme.
Figure 5: The two major needs areas and channels to deliver to those areas.
14
Ministry of Labour and Small and Micro Enterprise Development | Enterprise Development Division
BUSINESS INCUBATION IN TRINIDAD AND TOBAGO May 24, 2011
It should be stated that the ‘For Profit’ and ‘Not For Profit’ areas illustrated in Figure 5 are not mutually
exclusive and that the policy envisages an interchange or exchange of candidates in programs in both
areas, in particular the graduation of at least a proportion of those in social ‘Not for Profit’ programs
into the ‘For Profit’ programs. In other words the Policy provides for a seamless transition pathway to be
put in place to ensure each individual participating in these programs has the best possible opportunity
of achieving his or her aspirations through the provision if an integrated package of support processes
and resources.
Return on Investment
One key requirement of the Business Incubators is that all projects must provide a fair return on
investment. Therefore, every project that receives support in the Business Incubator should provide a
satisfactory return either economically or socially, i.e.
a. All funds invested are repaid with a satisfactory premium
b. The stated and agreed social objectives have been achieved.
Client/Project Selection
One of the key areas this Policy will address is to ensure that a formal needs assessment is carried out
before each proposed business incubation entity becomes established. A survey of current business
development programs and initiatives within T&T conducted as part of the draft Policy research process
indicates that many programs are delivering low outcomes. One of the issues identified is the
commitment of individuals to participate in such programs. Many are currently not highly committed
and so a great deal of resource is not being used effectively.
For this reason, the Policy will require some form of standardised formal candidate assessment and
selection process is put in place to ensure that only suitable candidates receive the support being
provided. However, to the extent possible, all individuals seeking to participate in the Programme will
be pointed to the institution for which they are most appropriately matched in order to ensure their
development for inclusion into the business incubator.
Thus, the establishment of a more formalised process to encourage business incubation needs to take
into account the true demand factor rather than being set up and then not attracting sufficient
candidates to ensure on-going sustainability.
The sites will be based on several criteria including:
a.
b.
c.
d.
Poverty, unemployment and underemployment
Accessibility to adequate infrastructure
Availability of resources (skilled and unskilled workers, financial resources, raw materials)
Availability of training skills to accommodate target groups
Ministry of Labour and Small and Micro Enterprise Development | Enterprise Development Division
15
BUSINESS INCUBATION IN TRINIDAD AND TOBAGO May 24, 2011
Intellectual Property
The incubation programme will address the concerns of prospective entrepreneurs with respect to
intellectual property (IP) rights. Upon commencement of the programme, all participants will be
advised of the need to protect their IPs from competitors and how such protection can be
obtained. Relevant advice will be given to patents, designs, copyrights and trademarks and their
usefulness to manage ideas through licences and franchises without risk.
Clients will be required to sign agreements of confidentiality to ensure that ideas generated in the
business incubator by one client cannot be utilized by another client without the former granting due
written consent. Any participant that illegally disseminates and/or utilises protected ideas will be
expelled from the programme and will be subject to due legal process.
All employees and administrators of the incubation programme will also be required to sign agreements
of confidentiality regarding the intellectual property of incubates and will be expelled from the
programme and subject to due legal process if found in breach.
Any IP that is generated in the incubator programme will be considered the joint property of the idea
generator (incubatee) and the incubator programme according to a pre-determined ratio.
Exits and Terminations
A critical component of the incubator programme will be the exits and terminations, i.e. (a) when the
relationship with the client will be curtailed if the venture is successful, or (b) when the relationship
should be terminated if a venture is not achieving the stated goals and targets and not likely to generate
a satisfactory return.
The goals and targets for each incubator and each client, as well as the timelines, will be established at
the beginning of the relationship. Clients will operate within the incubator for those predefined periods
(but not exceeding 4 years), with approval required from the Governing Body to operate beyond the
predefined period. During the period within the incubator, the client must adhere to all of the rules and
guidelines of the incubator.



A company may choose to exit the program prior to its termination date
Failure to meet the terms of the Agreement, to comply with regulations, to accept professional
mentoring and/or achieve agreed upon milestones can result in early termination of a
company’s Agreement.
Clients will provide baseline financial, sales, employment and other agreed information within
its period in the incubator for accountability and evaluation purposes).
Alliances and Integration
It should once more be noted that a key part of this Policy will be the alignment of the associated
programs and initiatives with those of other government agencies and Ministries to ensure a seamless
transition from micro through small to medium and large size enterprises can be facilitated for those
candidates who demonstrate the potential.
Ministry of Labour and Small and Micro Enterprise Development | Enterprise Development Division
16
BUSINESS INCUBATION IN TRINIDAD AND TOBAGO May 24, 2011
A key factor in the successful implementation of this Policy will be to collaborate with other key
stakeholder groups. Whenever Government engages in a partnership, its role will be clearly defined,
with its key role being:
a. To ensure appropriate funding is available for the project; and
b. To provide for the training needs of the incubator clients;
c. To ensure that the project is appropriately equipped and supported by the resources and
infrastructure required in a modern business environment;
d. To monitor and evaluate the programme to ensure that it is having its expected impact.
The Incubation Program Operations Systems
The operation systems in the incubation programs will be based upon best practice models used in small
country situations that have proven to deliver highly successful outcomes. Such models are generating
80 – 90% successful graduation rates (graduate companies that are still in business at least three years
after graduation) in other countries.
Under this Policy such successful models will be adapted to suit the local requirements in collaboration
with the implementing stakeholders.
Staffing
The Incubator will be operated by:
a. A proactive, dynamic and results oriented manager.
b. Full time professional and administrative management staff whose major responsibility will be
to provide direct support to the MSEs.
c. A cadre of skilled professionals who will provide mentoring and professional consulting services
to the clients in marketing, financial management, ICT, technical and technological support, legal
services, human resource management and other support areas.
The management’s staff primary duties will include:
a.
b.
c.
d.
Ensure the implementation of plans and programmes developed by the consulting team
Provide administrative services required by the MSEs
Ensure that the MSEs comply with all requirements of the Business Incubator Programme
Ensure that there is timely reporting by the clients to relevant stakeholders
Monitoring and Evaluation
Monitoring
This will be a continuing function that will systematically collect data on specific indicators (relative to
the specific business incubator). This will provide the relevant stakeholders with indicators/benchmarks
Ministry of Labour and Small and Micro Enterprise Development | Enterprise Development Division
17
BUSINESS INCUBATION IN TRINIDAD AND TOBAGO May 24, 2011
on the extent of progress and achievement of objectives and progress made towards the desired
outcomes. This monitoring process will be achieved during the critical phases of the business incubator:



Pre-Incubator Phase (Admission Criteria, Screening and Scoring system, Initial Assessment)
Incubation Phase (Status Reports/Routine data collection on the following; Access to Finance,
Training delivery, professional services provided, support mechanisms and Public Private
Partnerships )
Post-Incubation Phase (Reports on the number of business start-ups, business expansion
efforts)
Evaluation
This process will determine (i) the impact of the programme, (ii) the relevance of its objectives and (iii)
the efficiency of its use of resources and the sustainability of its results. Evaluation will be conducted
according to the aforementioned phases.



Pre-incubator Phase (Needs assessment, feasibility study)
Incubation Phase (Process Evaluation - to evaluate whether or not activities are being delivered
as intended, are participants being reached as intended?
Post –incubation (Impact Evaluation – to what extent can changes be attributed to the
programme, what are the net effects?)
It is envisaged that the M&E process will be carried out on a periodic basis and use a series of Key
Performance Indicators (KPIs) to measure progress. Examples of such KPIs may be:




80% successful graduation rates from the business incubation programs (both commercial and
social). Such success is defined as the number of businesses successfully trading 3 years after
graduating.
At least one company graduating each year achieves a US$ 50 million turnover with 5 – 10 years.
10% of those who enter the social programs graduate either into the social business incubator
and commercial incubator programs.
The establishment of a defined number of business incubators in partnership with existing
agencies/ groups that already have significant resources and expertise at hand.
The performance of each programme will provide a measured assessment of progress towards the
policies stated targets based on the intended impact.
Conclusion
Micro and Small Enterprises (MSEs), defined by fixed assets, revenue generation, or persons employed,
are largely dependent upon more comprehensively developed or evolving productive sectors or clusters.
Hence, communities are built and developing support of growing sectors and cluster that encompass
not only MSEs but also larger business entities. Their development depends upon having a sound
Ministry of Labour and Small and Micro Enterprise Development | Enterprise Development Division
18
BUSINESS INCUBATION IN TRINIDAD AND TOBAGO May 24, 2011
investment climate, the right set of capabilities and enablers, modern infrastructure, and the
encouragement of true entrepreneurship and innovation.
Implementation of this National Business Incubation Policy is expected to make a significant
contribution towards the future because it will be delivered using a collaborative mutually beneficial
approach that includes defined targets for achievement and progress towards the policy goals. Such
progress will be formally monitored and evaluated to ensure that the expected results (or better) are
realized from the nation’s investments being made into business incubation and development.
19
Ministry of Labour and Small and Micro Enterprise Development | Enterprise Development Division