Business incubators in the framework of local developmentslap.skgo.org/.../04/Business-Incubators-System.pdf · incubators • Most incubators are initiatives of local governments

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Business incubators in the framework of local development

Introduction into the system of Business Incubation

Belgrade 2.4.2015

Expert for GIZ: Franz Dietrich

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Dissemination of Business Incubators

Awareness rainsing for Local governm. Intro 15.04.2015

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Start – ups in Germany

Awareness rainsing for Local governm. Intro 15.04.2015

Total new businesses in 2013: 755,000

Total small business start- ups: 238,000

Total side line businesses: 249.000

Total new business in incubators: 1,370

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Definition Business Incubators + their relation with the environment

Awareness rainsing for Local governm. Intro

Basis: Regional Potential

Industry

Research & Development,

Higher education

institutions (HEIs)

Industrial-/Commer-cial Zone

Science Park

Business Park

Technology Park

Business Incubators/

Innov. Centres

Goal: Creation of Wealth (new companies, products + services, innovation, technology transfer, jobs)

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Business Incubator types Business incubators + their relation with the environment

• Business Incubator (BI)

• Innovation Centre (IC)

• Technology Business Incubator (TBI)

• University Business Incubator (UBI)

• Start – Up – Center

• Business Support Center

• Business Development Center

• Technology Park (TP)

• Accelerator, Hub, Pre-Incubator,........... Awareness rainsing for Local governm. Intro

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SME

SME

Science and/ or Technology Park – Elements

University

HEI

Business Incubator

Park-Management

Larger companies

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Facilities + services, the generic model

A full-service incubator usually offers: • Incubator space: offices or workshops, sometimes labs, available on

a flexible, affordable + temporary basis (easy-in + easy-out), more & more: pre-incubation rooms

• Common services: incl. secretarial support, telephone answering, common reception, mailing facilities, access to computers (LAN) and other office equipment, meeting rooms and (in some cases) cafeteria/canteen facilities

• Business counselling, namely ‘hands-on’ assistance with regard to business planning, training in management skills, access to accounting, legal-, marketing- + financial expertise, + ad hoc advice

• Access to finance + specialist advice: some operate own seed + venture capital funds; access to specialist advice will be provided if an incubator does not have the skills + know-how itself


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The role of municipalities and business incubators

• Most incubators are initiatives of local governments ( 80 – 90 %) as part of their

• Reactive approach need oriented, stimulate job growth

• Proactive approach change the regional economical profile

• Entrepreneurship development is a local task in most countries

• Development of commercial zones and business infrastructure is a local task

• Local governments can receive public funding

• Local municipalities own adequate buildings and/ or green area for the development of Business Incubators

• Local governments can make “not for profit” decisions

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Other important actors in the region with potential to become stakeholders

• (SME) Development agencies

• Regional governments

• Regional Development Agencies

• Chambers

• Associations

• HEIs

• Training institutes

• Technology transfer agencies

• Private service providers: like start – up consultants, lawyers, accountants,......

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History First business incubator + origin of the term

• First incubation activities in the USA + Western Europe partitioning space, share services by J. Mancuso

• Batavia Industrial Center (BIC): first business incubator, founded 1959 (Batavia/ State of N.Y.)

• Still operating (110 tenants, 1000 working places

• Had much in common with present initiatives in Eastern + Central Europe for restructuring + revitalisation of industrial areas


Batavia Industrial Centre (N.Y.)l

http://www.mancusogroup.com/properties_bic.html

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History Dissemination of the business incubator concept

• European pioneers in business incubators – based on the science park concept + focussing on promoting technology-based start-up companies: • Herriot-Watt University, Edinburgh (1969), Cambridge University

• Followed by projects in

• Australia (1972)

• Asia (1974)

• Scandinavia (1982)

• Germany (1983) BIG Berlin

• Latin America (1986)

• Eastern + Central Europe (1990) at the same time in Africa

• Different continents developed quite heterogeneous models


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History (cont.) Development of the concept in US + Western - Europe


Managed Workshops

Enterprise Agencies

Industrial Estates

1970s

Early 1980s

Business Centres

Business Incubator Concept

Science Parks

Multi-Purpose Incubators

Late 1990s

Specialised Incubators

Technology Incubator Centres

Incubator without walls

Sector-specific Incubators (e.g. rural incubators)

Source: UNIDO

New Econ. BI

Virtual BI Hubs, Accelerator, Pre-Incubator

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Types of business incubators Different forms of categorisation

• There are common characteristics of Business Incubators

• There is a generic Business Incubator model • There is no single best practice model • Each Business Incubator features also regional

characteristics • Business Incubators should be embedded in the

regional development system • respond to the specific needs and requirements of

would-be entrepreneurs in their region • should pro-actively address untapped regional potential


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Grouping of Business Incubators General Purpose Incubators are

• most common and usually

• accommodate a client mix of start-ups and young companies,

• developing more production based businesses with a

• no -, low – or medium - technological orientation

• businesses in the service sector

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Grouping of Business Incubators

Technology Business Incubators (TBI)

• focus on promoting technology-based business start-ups.

• ‘Technology-based’ is not the development of technologies but the set-up of a company wanting to sell its technology-based product or service on the market.

• Therefore a Technology Business Incubator is not to be confused with an applied research centre

• Technology Business Incubator are often closely developed and operated by or with the local university

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Grouping of Business Incubators Agroindustrial Incubators

• often quite technology oriented (and then they are often close to a University Business Incubator)

• transferring scientific know-how to entrepreneurial activities in the food-sector

Social Incubators often

• take care of underprivileged and disadvantaged people,

• often linked to traditional sectors

• high focus on job creation and employment

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Dissemination of the business incubator concept • Today:

• approx. 65 associations (international + national) of business + innovation centres or science/ technology parks actively promote the development of new companies + regional economic development

• more than 9,000 incubators worldwide

in Europe: • around 2,000 incubators generating 40.000 gross new

jobs/ year; results being achieved at an average cost per job to public authorities of around 4.000 € net

(Source: European Commission 2008; newer sources, where available)


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Business activities in which European business incubators specialise


Business Activities Percentage

(1) Sales, marketing and distribution 0.4 (2) Business and financial services 0.6 (3) Advanced/ high-tech manufacturing 18.6 (4) Information & communication technologies 18.2 (5) Research & development 12.2 (6) Biotechnology/ pharmaceuticals 14.2 (7) Knowledge-based industries/ new economy companies 11.5 (8) Other manufacturing activities 6.1 (9) Other service activities 8.8 (10) A combination of some/ all of these activities 9.5 Total (multiple responses possible) 100.0

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Examples of business incubators Technology Business Incubator: TZDO – Dortmund Technology Centre • Opened in 1985 + belongs to the largest technology centres Europe-wide

• approx. 90 companies, 1.300 work places • size: 70.000 sqm, consists of 8 complexes of buildings • with complete service-package + established network-links to main agents in the

region • PPP by local admininistration, chambers and 7 banks

• Focus on existing technology potentials in science + economy: Micro-systems-technologies, IT, technology-oriented services, electronics, mechanical engineering, logistics, environmental technologies, biomedicine


TZDO Technology park Dortmund

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Examples of business incubators (cont.) Sector-specific ->Craftsmen GHG – Incubation centre for handicraft + trade Töging am Inn • Background: former production location of an aluminium company

• Focus on: founders of new businesses + young entrepreneurs from handicraft + trade, but GHG is also open to other branches

• Size: 2.500 sqm of workshop/production space + storage areas with integrated offices + services (e.g. counselling for target group)

• Management company composed of town, district + 2 banks

• Clients: 34 companies + organisations (e.g. chamber of handicraft)


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Examples of business incubators (cont.) Sector-spec. TBI Biomedicine IZB Innovation- + incubation centre biotechnology Martinsried • Located in Munich, founded 1995, run by a management

company (with predominant share of private sector)

• Management comp. builds networks + provides also seed-capital + counselling services

• Promoted by Bavarian government initiative “High-tech-strategy Bavaria”

• Size: 17.000 sqm (after enlargement) campus-like with kindergarten for children + cafeteria + offering conference facilities

• Tenants: 40 companies focussed on medical biotechnology, approx. 500 employees

• Graduates: 90, settled in the surrounding SP


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Examples from other countries: Austria Software centre Hagenberg, Upper Austria

• Founded 1988, located in the Software park Hagenberg

• Size for clients: 7.200 sqm, enlargement is going on

• Favourable environment due to location near to on-site research institutes, competence centres + polytechnical university

• Focus: ICT

• Austrian-wide network provides start-up assistance to entrepreneurs

• Upper Austria is among the top-networking regions in Europe concerning its cluster strategies

• Each incubator focuses on particular technologies + clusters


http://www.softwarepark.co.at

http://www.softwarepark.co.at/

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Examples from other countries: Ireland Dublin Business Innovation Centre (Dublin BIC) today also: Guiness Enterprise Centre (GEC) • Opened in 2001 initiated due to need for enlargement

of the existing EU-BIC in the disused premises of a former warehouse from the Guiness Group

• Joint initiative of public + private sector (ppp of six partners)

• Focus primarily on: software services oriented businesses, hi-tech prototype engineering, e-commerce, internet + mobile technology development

• Own seed capital fonds

• Size: 5.000 sqm

• 83 companies (2013)

• Max Stay: 33 month


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Examples from other countries: Thailand Khon Kaen University Business Incubator


• Location: 1st Floor Pienwitjitr Building, Khon Kaen University

• Management:

Managing Director (full-time)

2 Business advisers (ft)

1 accountant (part-time)

• Area

Total 280 sq.m.

Management Area: 144 sq.m.

Incubation Area 136 sq.m. (6 rooms for rent)

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Offices


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TIKKU Financial Key Figures • Investments:

• Reconstruction: 70.000 USD

• Infrastructure: 20.000 USD

• Operational cost per year: 60.000 USD

• Deficit spending ratio: 70 %

• No. of Applicants (last year) 59

• No. of Applicants accepted to join TIKKU 38

• Fail / Quit during incubation process 20

Start-up and sustainable business 18

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Business Incubator Malacky, Slowakia

• Set up under framework of CbC 2001 - 2004

• Multi purpose/ multifunctional incubator in the heart of Malacky

• 4,500 sqm

• 60 offices (from 20 – 60 sqm.)

• 10 production areas (up to 130 sqm)

• Today 27 incubatees and 15 commercial clients

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Business Incubator Malacky

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Key European incubator performance statistics + suggested benchmarks

Setting up + operating Average Range Benchmark Average capital investment cost € 3.7 m. € 1.5 – 22 m. na Average operating costs € 480,000 p.a. € 50,000-1.8 mio. na % of revenue from public subsidies 37% 0-100% 25% 75% self-

finacing ratio Incubator space 3,200 sqm 90-41,000 sqm 2,000-4,000 sqm

Number of incubator clients 27 firms 1-120 firms 30 +

Incubator functions Average Range Benchmark Incubator occupancy rates 85% 9-100% 85% Length of stay 35 months 6 months – no

max. 3 years

Number of management staff 2.3 managers 1-9 managers 2 ++ managers

Ratio of incubator staff: tenants 1:14 1:2 – 1:64 1:10–1:20 % of managers’ time advising clients 39% 5% - 80% 50%

Source: Europ. Commission

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For questions: Franz Dietrich

[email protected]


mailto:[email protected]



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Thank you for your attention.


Documents

Business incubators in the framework of local developmentslap.skgo.org/.../04/Business-Incubators-System.pdf · incubators • Most incubators are initiatives of local governments