Augmenting Innovations:
Models of Incubators
Genesis:
A decade of work in scouting innovations at grassroots at the Indian Institute of Management, Ahmedabad, had convinced many of us that India has the capability of becoming an inventive society. The major stumbling block in that path was not lack of inventiveness or innovations but almost total absence of hand holding and mentoring support for these innovators, not to speak about other infrastructural and investment support. How to link the golden triangle of innovation, investment and enterprise around a knowledge and technology network became a major challenge.
The work at grassroots pursued through Honey Bee network has led to build up of a large data base of innovations. None of these had become a basis of enterprise till last year when we had organised an International Conference on Creativity and Innovation at Grassroots at the Institute in January, 1997. Subsequent to the recommendation of the conference several state governments showed interest in setting up venture promotion funds but only Gujarat Government came forward to actually do so. Gujarat Grassroots Innovation Augmentation Network (GIAN) was set up with proposed corpus of Rs one crore. The process has begun.
But we realised that it was not sufficient. Creativity can not be compartmentalised at different levels and scales. Innovations at grassroots level were necessary but not sufficient in taking the country forward.
Several of us asked ourselves whether we could not scout innovations in the industrial sector also? What has been the experience of various venture funds which were supposed to help such technology based start up enterprises? What struggles do individual innovators unattached to any institution go through? How can we create Knowledge and technology networks in the country to promote lateral learning among innovators and innovation based enterprises.
As we moved along for planing this workshop, two new issues cropped up. One concerned the innovations in public sector where a specific innovation had been developed to solve a problem and then the idea did not go further. The application of these innovations in other sectors was not explored. Second, most venture funds had not really helped innovation based entrepreneur without much net worth. Sweat capital was not valued and many of the young innovators and entrepreneurs did not have much capital of their own to invest in these enterprises. They borrowed money from friends, some sympathetic banks and moved along at a pace which was much slower than what would have been the case if they had got good support.
In almost all the individual cases, no management support, mentoring or hand holding support was provided. The two way flow of people between public and private sector is still seen as an aberration. The enormous research and development infrastructure in the country has remained inaccessible to many of these individual innovators.
Department of Scientific and Industrial Research ( DSIR) and Department of Science and technology, Indian Council of Agricultural Research have started many schemes for helping innovators as well as innovation based entrprises.
One of the latest such schemes started by DSIR is TePP i.e. Technopreneurs Promotion Program. It seeks to help individaul inventors and innovators from any organised or unorganised sector.
Evolution of Incubator:
The concept of incubator, we have realised addresseses some of these problems and challenges.
We have tried to abstract three models of incubators:
The general framework for incubator which addresses policy, institutional and technological aspects of innovation in formal and informal sector is given in Figure one. Three other models which emerge from the review of more than 40 models are given in figure two, three and four.
The purpose of the workshop is to analyse the strength and weaknesses of various models and then explore what directions to chose for future collaboration based on the experiences of innovators, lessons from incubators world wide and our collective understanding. If this workshop can make the struggles of the future innovators in the country less stressful than has been the case so far, we would have achieved our mission.
Models of Incubators
As explained above, the idea of incubator is organically linked to what we have been doing in India for last ten years or more. However, it is true that no systematic effort has been made in the country to develop a chain of incubators to nurture innovations.
It is also true that the incubators that we are proposing differs from what has been tried in the western and eastern countries in several significant ways. For instance, most incubators around the world do not scout innovators. They wait for them more or less. Majority do not insist on innovation as the basis of the start up business. Some do. We have to learn from various models and draw the relevant lessons.
The birth of the modern incubator in the west can be traced back to early fifties when incubator like facilities were set up in silicon valley as well as in New York. Mr. Joseph .L. Manusco started his Batavia Industrial park in Buffalo, New York in 1959.. Manusco transformed a piece of industrial park land near Batavia(Buffalo city, New York) into a commercial center. At the time, the north eastern states were facing severe economic recession. Manusco commercial center provided to entrepreneurs the equipment, facility, credit and consulting to improve local economy and boost employment. The industrial park also provided favorable policies and support systems such as tax exemption, tax deduction, tax reduction, information on water, natural gas and waste water management etc. The commercial center built by Manusco can be considered a prototype of today's incubator's in the west ( NBIA, 1998).
The Incubators were earlier performing four major functions:
However, with the rapid changes witnessed in the business environment the incubators have also evolved and have become versatile and flexible. The new functional areas that incubators have ventured into are mentioned below.
The vaccant space at office building or Industrial Parks are leased out to new businesses to generate revenue (rents on an average are 20% cheaper to the prevailing market rates). It is expected that the returns on the sale of the property would be higher due to the presence of a range of business enterprises in the area. The revenue generated help the owners of the building to pay of the interest on loans (loan terms are flexible and allow for deferment without the compounding effect) and the new businesses get to find office space with at affordable rents.
These are specialized parks which provide community infrastructure support to a broad business category such as Bio Technology based companies or software companies. Tenants of similar and related companies often exchange market information, extend company networks and even share common equipment in a more efficient and mutually beneficial way. It is called "The Cluster effect". MIT Biotech Park and Software Industrial Park are excellent examples of community incubators.
3. Marketgate of Foreign Companies
Foreign companies completely alien to the local business environments, tend to start with incubators to understand local regulations and build market presence and understanding before they can be independent. At IBI (International Business Incubator) of San Jose , California , a special area was reserved for Japanese and Korean companies. Japanese and Korean delegates provide consulting services to help the new entrants adapt easily to the environment .Similar arrangements is made in New York for Taiwanese Businesses. As for European businesses, one can find similar arrangements in Boston.
Big companies and private enterprises in order to optimize space, capacity and R&D facility utilization allow employees to work on innovative products and services that are not compatible with their current products. The companies expect to generate huge revenues if a successful product or innovation is developed by the intrapreneur. IN addition to infrastructure these companies also provide subsidy, channels, consulting or even funding to the intrapreneurs.
In developing related businesses, state run companies create intrapreneur who are permitted to use infrastructure and other facilities available with them to develop innovative products and services.
Industrial/ Commercial development parks provide better visibility, cheaper infrastructure support, availability of easy and cheap consultancy to the small enterprises. The Chinese government has been promoting proliferation of such Industrial and Commercial parks to boost industrial and economic growth.
Shopping mall lease out additional space to small entrepreneurs for carrying out businesses. The mall generate revenue in the bargain while the entrepreneur gets to utilize infrastructure available at the mall at a fraction of the cost. In addition the mall provides secretarial and other assistance to the entrepreneur.
Classification of Incubators
Incubators may be classified in three broad categories based on the ownership and motivation.
These incubators may have further classifications based on whether they promote technology or services, and whther they are profit seeking or non profit promotional organization.
i. Public incubator ( Figure two)
The initial thrust in all early incubators came from the public sector. The government in order to push technology based industrial development realized that there exists a gap in the chain for converting innovations into marketable product. The innovative instinct was not able to communicate with the market forces thereby slowing down the technology growth. As no other interest group was ready to invest money in creating this missing link the onus came on the government. Once the importance of incubation for promoting technology was driven home, public sector, in order to optimize space and under utilized capacity, promoted incubator facilities. The success of some early innovators graduating from the incubation process underlined the importance of setting up independent incubators. The public incubators therefore were the ones which were wholly owned and run by the government.
Trigger
The public sector incubators were triggered by the concerns for fledgling economy, coupled with rising unemployment. Some of the countries were plagued with problems regional disparity in growth due to concentration of industries in favorable geographical locations. Some of the important triggers for public sector business incubators are listed below.
a) Technology promotion
To promote growth of technology, government funded incubators were set up to provide infrastructure and laboratory support at lesser cost to innovators. Such incubators were providing community incubator services most of the time. This reduced the initial cost of buying specialized machines and promote cross fertilization of ideas.
The High Technology Business Incubator Network promoted by the Chinese government is an example of incubator set up in response to technology promotion trigger.
b) Regional disparity
Large countries like China have witnessed imbalance in regional growth due to concentrated industrial development due to favorable infrastructure, policy and business environment in some areas and the absence of the same in the others. To counter this imbalance the Chinese government promoted incubators in the areas which were not as progressive as others by creating favorable policy incentives. The flow of capital and industry in those areas is responsible for development of atleast five to seven new urban centers in remote places.
c) Unemployment
During the period of economic turmoil many conglomerates and business majors decided to cut costs and expenses by means of Layoff in order to survive. However, severance pay is a burden and does not bring any future benefits. Also the rise in unemployment creates socio-economic unrest. Governments in various countries under such circumstances has promoted setting up of incubators to provide space and infrastructure to these skilled people to create a new innovation, service or enterprise.
The Incubators in Pennsylvania and Massachusetts were set up to provide alternatives to the technical manpower being retrenched by Auto and Shoe majors in the respective areas.
d) Inviting foreign resources
Governments, in order to attract foreign investment and talent promote incubation activity. These Incubators provide Marketgate facilities to MNC’s as also opportunities to talented individuals to test there ideas.
The Israel based Incubators were designed to exploit the potential talent of the Russian immigrant after the breakdown of the erstwhile Soviet Union.
e) Macro Policy management
In some countries like Taiwan, the period of transition from labor intensive to technology intensive industrial growth was preceded with promotion of incubators by the Government. These incubators not only attracted new technological advancement and technical manpower but also give the local manpower to learn newer technology.
Services Offered by the Public Incubator
Services of these Incubators can be broadly classified into following types
Hardware services
The incubators provides office and production facility, development and production apparatus; specialized materials, energy source, and requisite financing and funding mechanism.
Software services
Management support in administration, financial management, business planning, marketing,
Preparation of feasibility studies, market research , identification of suppliers and customers, protection of intellectual property rights and legal affairs.
In addition to these common services the public incubator provides policy measures and other exclusive support mechanism which other incubators cannot provide. For example in China, the experiment zones have tax holidays up to a maximum of three years. In addition all the enterprises in these areas enjoy favorable tax breaks once the tax holidays are over. Public incubator also influence external decisions as was witnessed in Taiwan where the public incubator could influence the construction of a commercial port to facilitate export from the incubator zone.
Selection Criterion
The criterion to select companies or innovators for a incubators is greatly influenced by the trigger. Incubators select companies on the basis of feasibility, future potential, ability to generate exports, incremental innovation level etc.. Some of the Criteria that an enterprise has to meet are
The selection criterion has lot to do with the level of innovation. If the idea or product does not meet certain minimum level of incremental innovative activity it would not find place in a public incubator.
The background of the innovator, his experience in related field, his ability to lead are taken into account before the project is selected.
The time frame for the project to reach its desired level is very important. Though the public incubator are normally liberal in there approach however, a cut off limit of three years is normally practiced.
In addition to the technological know how, the market potential of the product is very important criterion.
Graduation
Once the company has achieved the desired level of maturity it is expected to graduate out of the incubator. The graduation period in the public incubator is normally three years except in Israel where all incubators have a set time frame of two years only.
ii. Public and Private partnership incubator ( figure two)
Though most of the early incubators were initiated by the government and public enterprises, there has been a distinct change in ownership of these incubators. Today the line between the Public initiated incubators and that of the Public/Private partnerships types of incubators is less marked. A majority of the incubators which were earlier initiated by the public enterprises have now been incorporated as independent corporate entity. These companies make there own policies as to there governing, selection criterion, disposal of income , if any etc.
The majority of incubators world over are such public private partnership incubators. This metamorphosis has therefore reduced the role of the Public Incubator as an initiator alone rather than of being a full fledged executor.
The Beijing New Materials High-Tech Incubator was initially established by the government but was later incorporated as an independent corporate company.
Triggers
The trigger that prompted the change of the public incubators to a partnership incubator may have been prompted by the changing needs of the clients themselves. The public incubators were set up in form of Science and technology park to promote technology based economic growth. These incubators were catering to the need of start up companies. With the incubator maturing over time, the graduated companies settled near the incubator and became established companies. These companies required business incubation support for keeping up with the fast paced growth they have achieved due to the earlier STP’s incubation support. As the need of the client changed from STP 's (Science and Technology Parks) to Business incubators (KBI-Knowledge based Business Incubators) the public ownership came under more stress. The need of business incubation was much wider and it desired participation from the private enterprises leading to the emergence of the public private partnership incubators.
Services
These incubators provide services to a larger pool of clients as compared to other kinds of incubators. This is in keeping with the spirit and size of public/private partnerships. They address the needs of a more diverse clientele, hence the portfolio of services is also diverse. These services include infrastructure and administrative support, funding, business plans, marketing, technical assistance, research and development, collaborations with key R & D and production facilities.
The financing and funding services are customized to the needs of the clients. The Israeli incubators offer the participants companies a chance to avail either direct or indirect financing from "angel investors". Investors have a chance to invest in a company of there choice or a portfolio of companies. Once the company graduate, preferential shares are issued to the "angel investor".
Selection Criterion
The selection criterion for a partnership incubator is same as other incubators.
Graduation
The enterprise graduates from the incubator once it has reached its maturity. The normal period of graduation is two to three years.
iii. Private Business Incubators ( figure three)
Of some 2500 incubators in the world today, less than 10% are private, for-profit facilities run on a commercial basis. Other private business incubators are non-profit. They do generate revenue, but that is purely for self-sustenance. The mission of incubators is to provide a business location, business development and on-site support services to fledgling firms, increasing the likelihood of their success during the critical first years. The term ‘Business Accelerator’ is sometimes also used. The main goal of these incubators is to produce successful graduates: freestanding businesses that are financially viable when they leave the accelerator/incubator. Thus the entrepreneur can outgrow the incubator and retain full control of business affairs.
Services Offered
In an incubator, small businesses get access to facilities, equipment and experts that may be financially or logistically out of their reach. The incubator helps the business create a professional image and develop strategic relationships. The services offered by incubators include competitive rent rates, on site business support and consulting, access to shared resources, computer services, marketing, technical assistance, commercial evaluation, licensing, feasibility studies, sales and market forecasts, patent and trademark searches and business plans. Tenants i.e. clients in the same place also give each other emotional support. An ‘incubator family’ forms where everyone is involved with each other’s progress.
Tenant companies may be assigned advisory teams, advisors who volunteer their time to help the company grow. The incubator helps the tenant company gain commercial advantages by establishing strong community network with government, business/community leaders, bankers, attorneys and accountants. It may offer training programs and educational courses for entrepreneurs. Media opportunities may also be provided. For those unsure about whether or not they want the services of an incubator, transitional space programs are an option. Tenants need not spend on a lease all at once. They can lease space on a month to month basis to give them enough time to decide whether to stick on with the incubator.
Triggers for Incubators
What triggers private business incubators? The main goal of privately controlled for-profit incubators is economic reward. They are usually owned or managed by venture and seed capital investment groups or corporations and real estate development partnerships. On the other hand, private non-profit incubators may have goals ranging from a desire to give something back to the community to generating jobs or developing the local economy.
Harlan Jacobs, a moderately successful private investor, tried unsuccessfully to interest some venture capitalists in his idea of an incubator. Deciding to fund it himself, he used cash harvested from a couple of fortuitous investments to lease space for an incubator, Genesis. Genesis is a for-profit business but it collaborates with a non-profit government development program and a profit equity fund.
The Inland Empire Business Incubator, on the other hand, was formed by the Inland Valley Development Agency in Anoka to help replace 10 000 local jobs lost due to the closure of Norton Airforce Base. Tenants are selected on the basis of viability of business and ability to produce jobs for the region. The ‘Centre for Innovation’ incubator was started by Bruce Gjovig in 1984 in response to requests from manufacturers and entrepreneurs for guidance and technical assistance. The ACE-Net, an internet based securities listing service, was started to provide entrepreneurs the opportunity to seek equity financing too low to attract most venture capitalists. Hence, the rationale for an incubator will vary, depending on whether it is for-profit or non-profit.
Equity and Royalty Agreements
Incubators may take equity in the fledgling enterprise as a deferred payment. The client company gives its shares to the incubator in return for rent, utility payments and services like counseling and introduction to potential investors. The incubator gives its services now with the understanding that it will receive cash down the line when the company goes public or is acquired by a third party. For instance, Harlan Jacobs’ Genesis takes stakes in the startups it supports. In return for financing, free space and other assistance, it demands 0.5% piece of the action. Of course, if the company flounders, the incubator may have traded valuable services for worthless paper! The good part is that if the fledgling company uses its stocks as an alternative currency, it can save capital for other crucial things. Besides, because the incubator has a stake in the company, it does everything possible to make it succeed.
An alternative is to have royalty agreements. This provides quicker benefits to the incubator in comparison to equity agreements. Instead of becoming a stockholder, the incubator gets a percentage of the company sales. Thus a company need not sell out or go on the stock market; it must simply generate gross sales.
A thorny issue is the question on who profits more, operators or entrepreneurs. Some operators demand majority interests in ventures they back, and recruit outside managers to help run them. Yet, many small business owners are willing to cut such deals to get on the fast track. Ancillary evidence suggests they may be right, as some for-profits have better scorecards than their non-profit brethren.
Selecting a Client
Clients are selected on the basis of the viability of their business and ability to generate jobs. Some criteria the businesses must meet:
Selecting the ‘Right Incubator’
Selecting the right incubator needs some research. (The National Business Incubation Association in Athens, Ohio (Error! Bookmark not defined.) provides a list of leads as a starting point.) It is a partnership that can last for two years or more. Many problems will arise as the company transitions from a seedling to an emerging growth company. Ideally, the incubator should specialize in the industry niche of the client. The best incubators have a lot of practical operational experience to lend to entrepreneurs, and a great network of industry contacts. Some outfits try to do all for their clients. Some specialize in certain services. Some, like the Volkhov business incubator establish an educational institution that prepares local people to open and operate small businesses. Others run training programs. The entrepreneur needs to identify which services he will require and will benefit him/her most before selecting an incubator. He/she can also contact the local commerce board for information.
Graduating from the incubator
Tenant companies stay with the incubator for one to three years. Usually incubators have a definite time-frame within which the fledgling company must graduate. Some incubators may offer tiered rents that increase each year, to encourage tenants to graduate within a three year period. Others encourage the graduating companies to remain involved with the incubator in order to foster linkages with new clients and provide consultancies.
Web Marketing
The ‘Web Bidness Centre’ is a Solid Web Innovation that includes the Start-up Web Bidness Incubator, Web Merlin Marketing and other innovative web business solutions. The Start-up Web Bidness Incubator offers a profit sharing arrangement for those who qualify in exchange for the Bidness centre fronting most of the start up cost of getting onto the web and creating optimal site design. Not all products qualify. Those that do must be web-marketable. They should be unique, interesting, safe and unusual. They must ship well, so perishables are discouraged. The sale price must be within the ‘good fit’ range for web marketing. The entrepreneur must be able to document absolute rights to be offering the product for sale, must be set to fulfill orders with a real potential to handle large increase in sales, and be able to take credit card orders. The entrepreneur must have a good track record at business dealings.
Starting a Business Incubator
Starting an incubator requires time, money, management and planning. The steps involved:
There must be members from local government, private industry, community and/or educational institutions and local business development organizations.
One needs to gather both community and incubator specific information, including details of local economy.
Will the community support an incubator? Do potential tenants exist? Are resources for business services available? Can we do this? If the answer to all this is ‘Yes’, then the group needs to identify possible sites for the incubator, funding sources, sponsors and decide organizational structure.
The group needs to look at the cost and site suitability with respect to the kind of business they will locate in the incubator.
The working group must make a business plan including a management, operating, marketing and financial plan and a timetable. This is necessary not just for a successful business but also to qualify for funding from different sources.
An incubator greatly increases the likelihood of success of business survival for new start-up firms. An incubator program usually targets low to middle income groups, it increases the number of jobs in a community and strengthens the overall economy. However, they have a high start-up cost. Moreover it can happen that a business incubator never does become self supportive. Ultimately the success of a business incubator must be measured in terms of the degree to which it has fulfilled its specific goals.
iv. Incubators affiliated to Universities ( figure four)
Business incubators have had a significant impact on the survival rate for start-up small and medium enterprises (SMEs). Approximately one quarter of incubators in the U S have a technology-based business focus, affiliated with universities and colleges. (T F Smith). Incubators for technology based businesses are particularly attractive for university support as they provide a potential avenue for technology transfer and commercialization of university research. According to the National Business Incubation Association (NBIA.1998) report 27% of all North American facilities are affiliated with universities and colleges.
Mian(1994) made a detailed study of six N. American university-sponsored technology incubators that support new technology-based businesses, he noted that all the six have common objectives like:
In an Australian study carried out by the Industry Research and Development Board (1990), the Australian Government body established to encourage greater R & D focus in Australian industry. The study revealed that for projects funded by the board between 1976 and 1986, technological barriers were rarely the major cause for failure to achieve commercial success. But commercial inexperience was the frequent reason for the failure to realize a return on the R & D investment.
Role of University/academic institutions
An essential factor for the success of a university-sponsored incubator is the recognition of the enhanced benefit to the start-up business. It is to be expected that a university sponsored incubator will offer the range of business assistance that are characteristics of business incubators (Brunton, 1998)The additional feature that a university has to offer, will include:
Professional commercial service are advisory and consulting services on law, patent, IPR, accounting, funding, technology & commerce, and computer information networks.
Management services include:
1. Providing consulting services on product advertisement and marketing strategy
2. Leasing of equipment and space
3. Management training program and human resources information
The support of senior management, integration of the objectives of the incubator into the strategic planning of the university and strong promotion within the university are essential.
The La Trobe Experience:
The experience gained over the past three years in the operation of the TEC (Technology Enterprise centre) has led to a significant change in the strategy for the R & D Park.
The location of the R & D Park on the main campus offers a range of benefits and advantages to the tenants through ready access to the academic and recreational facilities of the University. Both the Park and the RTC (Research and Technology Centre) operate within the administrative structure of the University. The advantage of having the Park management integrated into the overall research management of the University at a senior level is that it facilitates interaction between tenants and academic staff, provides a key link between the research expertise of the University and the needs of the tenants and ensures that the Park is incorporated as a key component of the Research Management Strategy for the University.
Business Support:
In some universities the science and technology park play an additional role of business incubator. The incorporation of an incubator with a Technology Park offers the opportunity to establish a powerful synergy that broadens the scope for the long-term benefits to the university, with graduates of the incubator being the prime potential tenants for the Park (Lalkaka and Bishop, 1996) There are now at least 450 science and technology parks worldwide, most of them established to support technological and economic development.
The objectives of science parks:
1. To establish a "flagship" for technology development and transfer
2. Stimulate the formation and growth of new businesses which are research and technology intensive.
3. Attraction of inward investment by high tech businesses to undertake technology intensive activities.
4. Increase the relevance to firms of the research and other activities undertaken by related institutions.
Successful science parks put substantial resources into promoting interaction between the research, industrial and business communities, using the scheme as a vehicle to support development of productive links.
The IASP (The International Association of Science Park) identifies Science parks as technology transfer and business development initiatives that happen to have a property focus. They are much more than high quality industrial estates or business parks, (the distinctive difference being the knowledge intensity of the activities that are allowed in the Science Park)
For example, there are two well-established science parks in Cambridge, The Trinity Science Park and St John’s Innovation Park. These were started at a time when science were an unknown concept, it took a long time to get going, however, Trinity college developed some advance units for rent to suitable locally formed firms and eventually succeeded in attracting some blue chip multinationals. St John’s innovation park has been very active in supporting new business development by providing links to financial, business and technology support services, whereas Trinity has been supportive of firms which have sought their assistance to provide links into the University
Both the science parks were developed for a mixture of reasons, including achievement of a return on their land holdings, supporting the growth of science based industry in the area and providing opportunities for the formation and growth of spin out businesses from the university (Chris Green)
The example of Rensselaer Incubator Program (RPI)
This program founded in 1980, provides a supportive environment for nurturing new technological ventures. The Incubator leases low cost office, laboratory, and light manufacturing space to participating new ventures; Provides shred office equipment and services, connects entrepreneurs to university and community resources; Facilitates access to a broad-based network of business, financial and technical experts; and provides education and training programs to enhance the knowledge and experience of participating entrepreneurs.
The incubator and its tenant and affiliated companies are actively involved in the education process. Simultaneously the participating companies derive many benefits from this relationship. For instance, each semester several dozen students augment the theoretical training they receive in the classroom with hands-on "consulting" projects with incubator companies.
Entrance policy:
The submission typically follows initial exploratory meetings that introduce the incubation to the entrepreneur, determine if suitable space is available and whether the proposed business is a good match for the program
Exit policy:
Venture Affiliates of RPI (VAPRPI) program:
Under the leadership of President Roland Schmitt, the Center for Entrepreneurship of new Technological Ventures (renamed as CTE ;Center for Technological Entrepreneurship) was founded in 1988. In recognition of this growing infrastructure for new and young technological ventures, VARPI was established in 1989, specially designed to provide participating companies with a formal link to RPI and access to the resources of this expanding infrastructure. VARPI has about 60 member companies.
Rensselaer’s goal is to build an Entrepreneurship Triad in the Capital region composed of Technical Entrepreneurs, Business Entrepreneurship and Capital Entrepreneurship. They believe that a dynamic regional association of technological ventures will increase the probability of attracting the attention and participation of leading venture capitalists and business entrepreneurs nationally and internationally.
Summing Up:
Each model has some unique features and functions. It is difficult to say as what combinations will work under what conditions without having experimentation. But few things are clear:
Unlike western countries, much of the basic research and development infrastructure is located in public sector and without building bridges between private and public sector, we can hope to make any major impact. The motivations and incentives in public sector vary across organisations a great deal. Environment which promotes innovations is yet to be built in most organisations though some sectors have done admirably well.
The role of individuals innovators, unattached to any organisation, in developing new businesses can not be underestimated. But many of the innovators may not evolve into good entrepreneurs. How do we link innovators with entrepreneurs will depend upon the availability of Knowledge and Technology Networks. These networks will not merely help building bridges but also help mobilise expertise which is too costly and difficult to develop or sustain in any single enterprise.
The testing facilities in private and public sector will need to be made available to budding innovators. On the other hand, some of the tool room set up for such a purpose do not have many clients coming up. The knowledge and information gap will have to be bridged.
Students of different courses at IIMA and other academic institutions can take up joint projects with the innovators and entrepreneurs. This has the potential of forging new friendships and partnerships. Some of these students who generally do not work with small sector or set up their own enterprises, might get lured by the charm of some of the innovators. In fact students might even become equity holders if they also contribute to these innovations. Students of institutions like IITs, NID and other similar specialised institutions can very actively contribute towards this cause.
The network of innovation based entrepreneurs will itself be very powerful source of support for the incubators. Some of these colleagues might offer to become mentors apart from the faculty of the institutions hosting incubators.
The role of venture funds, banks and other financial institutions is also crucial in this regard.
There are many other ideas that we need to concretise for evolving incubators in India. We have summarised the feed forward received from the particpants of the workshop on (I3 E) Indian Incubator For Innovation Based Enterprises ( see annexure one).
Unless innovations become the basis of setting up new enterprises, we can not hope to become a leading economic power in the world. The innovations at grassroots in firms, at farms and in homes and at colleges have to have sanctuaries for their safe growth an maturation.
We hope that we have taken the first step in that direction.