Business Incubation

1
Business Incubation

• A Business Incubator is a facility that provides
• shared premises,
• business advice,
• business services,
• networking,
• mentoring, and
• a full time manager.

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Brief Introduction

• Emerged as an economic development tool during
  1980s initially in the USA and Europe.
• Spread around the world (5.000 incubators)
• 1.000 in Asia (the half in China)
• 1.000 in North America
• 900 in Europe
• 400 in Latin America

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Incubators as a policy tool

• Assist small firms during start-up period.
• Serve as a network integrating
• -high tech industries
• -universities
• -public organizations
• -other related actors
• Assist SMEs in the use of their resources in more
  efficient ways.
• Enabling well-educated technical and scientific
  personnel to implement their knowledge.

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Key partners involved in Setting Up Business
Incubators
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Incubators in Turkey

• Incubators in Turkey have been established by
  KOSGEB.
• KOSGEB is active in 22 of the 81 Turkish cities
  and operates
• 6 Enterprise Development Centres,
• 10 Technology Development Centres (TEKMER)
• Specific programmes managed by KOSGEB
• Technology Development Zones
• Techno parks

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Incubators in TurkeySurvey

• Survey in Turkey indicates that on-incubators
  firms
• Stated an increase in the employment,
• Stated an increase in the their sales revenue,
• Tend to accumulate technological capability at
  faster rate,
• Heavily rely on local labor market

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Starting an incubator

• Important decisions regarding
• The type of business incubator
• The services that will be offered
• The governance structure
• The human resources (in house vs contract out)

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Key success factorsThe four phases

• Preparatory Process
• Identification surveys to selected locations
• Local consultants who are familiar with local
  conditions
• Identification of a strong sponsor
• Resolution of issues concerning feasibility
• Commitment by governmental agencies

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Key success factorsThe four phases

• The Implementation Process
• A strong management board with advisory groups
• Appropriate legal status for the incubator
• Careful selection, training at home and abroad,
  proper remuneration of managers
• Screening of the technical business and market
  potential of tenants
• Wise capital expenditures on building renovation
  and furnishing
• A promotional campaign to mobilize community
  support
• Sound international technical assistance to
  supplement local skills

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Key success factorsThe four phases

• The Start of Initial Operations requires
• Involvement of the private sector
• Continuing programs for improving management
  skills of incubator staff and tenants
• Links to other SME programs
• Exchanges of information and bench marking

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Key success factorsThe four phases

• The Sustainability of Incubator Operations needs
• Imaginative ways of raising income
• An objective evaluation of the incubator
  experience
• Political stability, macro-economic policy
  structure and regulatory framework that encourage
  entrepreneurship

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Feasibility study

• Topics
• Market (need analysis)
• Stakeholder-Community support
• Facilities and Services
• Pre-Business
• Core-Business
• Outreach-Business
• Virtual Business
• Post Business
• Infrastructure
• Financial feasibility

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Types of Incubators1. Mixed Portfolio Business
Incubation

• Context
• Targets high-growth firms in a range of sectors
• May select sectors that keep-up with the overall
  regional and national competitiveness strategy
• May exist in environments where is little
  entrepreneurial activity

• Strengths
• Can grow new areas of competitive capacity.
• In environments with little entrepreneurial
  activity, may include extensive pre-incubation
  and education activities in order to source
  entrepreneurs and businesses.

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Types of Incubators2.Technology Business
Incubation

• Context
• Targets high-growth technology firms
• Require foundation of strong technology and human
  capital infrastructure
• It may require extensive pre-incubation
  activities

• Strengths
• Can be an economic resource by attracting and
  developing research, skills and businesses
• Can develop technology as a new source of
  competitive capacity

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Types of Incubation3. Business Incubation with
University Relationships

• Context
• Frequently the university has a role as founder
  and is a source of resources such as research,
  expertise, space and/or funds
• Typically targets technology firm, but may work
  with other sectors

• Strengths
• Opportunity to bridge the gap between research
  and commercialization or technology transfer
• Access to intellectual property and the potential
  to develop competitive business from it
• Often provides financial stability for incubators

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Types of Incubation4. Agri-Business Incubation

• Context
• Targets firms in the agriculture sector.
• Aim in commercialize innovative practices or
  transform sector firms from slow-growth to growth.

• Strengths
• Can often have significant economic and social
  impact by improving the live hoods of
  communities.
• Can have a agri-technology focus and focus on
  commercialization.

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Selecting companies

• The selection process has three critical parts
• Definition of criteria
• Process stages
• Professionals involved

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Providing services

• Infrastructure and Facilities
• Financing
• ICT services
• Pre-Incubation

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• Thank you
• for your
• attention