CRITICAL ELEMENTS OF SUCCESSFUL BUSINESS INCUBATION:

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• CRITICAL ELEMENTS OF SUCCESSFUL BUSINESS
  INCUBATION
• APPROACH AND MODELLING
•  
• Ing. Giuseppe Cardoni
• Director
• Parco Tecnologico dellUmbria - Sitech
• Loc.Pentima Bassa 21, 05100 Terni
• Italy
• From a research by Takis Damaskopoulos CASIS
  Paris and Giuseppe Cardoni PTU-Sitech

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• THE OPTIC
•  
• for new technologies that power the knowledge
  economy to be able to spread throughout the whole
  economy, thus enhancing innovation and
  productivity growth, business firms, the
  institutions and culture of society, and the
  factors engaged in the production process need to
  undergo substantial change
• the agenda of research and policy on the
  dynamics of adoption of new economy practices,
  innovation, and economic growth needs to be
  expanded beyond the level of the firm. It needs
  to be built around the dynamic interrelationships
  between technological transformations, firms
  organisational and knowledge-creating
  capabilities, emerging market and industry
  structures, and public institutions

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• PERFORMANCE PARAMETERS OF BUSINESS INCUBATION
•  
• Governance and management of incubation
• Enterprise development program of incubation
• Marketing strategy of incubation
• Physical facility and general business services
• Financial model of business incubation
• Technology transfer

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• THE CONCEPTUAL FRAMEWORK
• What is new in the new economy
• it is knowledge-driven
• it is global
• it is networked in terms of technology and
  organisation
• Organisational capital
• Changing type and relevance of knowledge
• The network enterprise
• Clusters of innovation
• Social capital

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• HISTORICAL EVOLUTION OF BUSINESS INCUBATION

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• AND WHERE WE ARE TODAY
•   
• acceleration and systematisation of creating
  successful businesses
• provision of a comprehensive and integrated range
  of support
• provision of services on a one-stop-shop basis
  which enables overheads to be reduced by sharing
  costs
• improvement of the survival and growth prospects
  of new start-ups
• generation of a steady flow of new businesses
  with above average job and wealth creation
  potential
• Differences in stakeholder objectives for
  incubators, admission and exit criteria, the
  knowledge intensity of projects, and the precise
  configuration of facilities and services,
  distinguish one type of business incubator from
  another

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• BUSINESS INCUBATION MODELLING

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• WHICH APPROACH TO BUSINESS INCUBATION IN UMBRIA?
• Approach A global economic approach to
  business that covers every aspect of a firm
• Focus May be high-tech, mid-tech, or low-tech
  or may even involve innovations of a
  non-technological environmental nature such as
  the development of ambient technology
• Key identify different enterprises and systems
  of knowledge and technology at different parts of
  the value chain and create an environment that
  maximises synergies which contribute not only to
  economic growth of the companies themselves but
  also to the economic growth of the region
• Role A facilitator or a village animator

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• BUSINESS INCUBATOR MODELLING which model?
• Market model a general business incubator
• Financial model a not-for-profit entity with a
  public mission that has a balanced
  representation of regional public authorities and
  private business community in its governing
  board
• Operational model a physical incubator model but
  with added non- physical virtual elements
  included in its structure of service provision
  wider geographical footprint

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• ELEMENTS OF A GOVERNANCE AND MANAGEMENT MODEL
• a balanced private / public representation where
  the local and regional business community
  outnumbers that of the public sector
• a shared understanding of the mission that the
  incubator is to achieve
• roles and responsibilities for the governing body
  and the management team that are codified as part
  of the incubators organisational policy
• a management team with demonstrated and relevant
  experience
• management team in a position to concentrate most
  of its activities to working with the portfolio
  companies of the incubator

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• ELEMENTS OF AN ENTERPRISE DEVELOPMENT PROGRAMME
• a mechanism to perform effective diagnoses on
  prospective client companies as part of the
  admission process
• a full range of formal and informal to support
  the development of the whole enterprise
• the provision of management development advice
  targeted to developing the skills of the
  portfolio companies management team
• an effective monitoring / tracking management
  system which provides systematic feedback on the
  effectiveness of the enterprise development
  program
• a graduation process which helps portfolio
  companies leave the incubator
• an emphasis both on local development and
  international attraction of start-up companies

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• ELEMENTS OF A MARKETING STRATEGY
• identification of the type of companies the
  incubation program will target
• identification of the benefits the incubation
  program offers its clients
• identification of the needs of prospective
  clients and proactively manage portfolio
  expectations through a carefully calibrated pool
  of service tools tailored to the need of the
  clients
• development of the capacity to package
  individual service propositions according to the
  needs of the portfolio companies a 360 degree
  view of the client company is a must

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• QUALITIES OF PHYSICAL FACILITIES
• a facility that is attractive to and compatible
  with the incubators target market and its
  clients developmental requirements
• a common social space for social integration and
  networking among the client companies and the
  wider business community
• the facility must be consistent with the
  incubators financial model

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• ELEMENTS OF A SUSTAINABLE FINANCIAL MODEL
• not be significantly tied up in facility rental,
  acquisition, maintenance and suchlike
  expenditures
• though the incubator might rely on public
  support funds in the initial phases of its
  operations, it should be run as a private
  business in that it should be expected to
  generate profit or at the very least break even -
  the incubator should not be seen as a funnel that
  channels public funds to start-up companies and
  other SMEs
• be protected from internal risk stemming from
  excessive reliance for revenues on a single
  portfolio company. In other words, the
  incubators portfolio must be diversified enough
  to mitigate financial risk
• must be protected from external risk stemming
  from dependence on singular external sources of
  finance such as regional government economic
  development programs

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• ELEMENTS OF TECHNOLOGY TRANSFER
• assess the existing stage of development of the
  region in terms of technology transfer mechanisms
  and practices with respect to RD quality,
  technology acceptance, technology implementation,
  and technology application
• engage the incubator into systematic relations
  with local and regional universities and research
  centres in order to identify key technology
  projects and their commercial potential
• position the incubator as the facilitator or the
  main liaison mechanism that links the originators
  of the intellectual property attached to
  particular technologies and other actors that
  play a key role in the technology transfer
  process
• develop informal links between the key actors
  involved in the whole chain of the technology
  transfer process

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• DESIGNING EFFECTIVE BUSINESS INCUBATION SERVICES
• develop an integrated range of services that is
  tailored to local needs and offers the necessary
  flexibility for individual portfolio companies
• provide a guiding hand to portfolio companies,
  advising them on which other means of support or
  service they could or should use
• proactively promote networking among the
  portfolio companies but also among them and other
  business communities at national and
  international network
• Trans-incubation a leading trend

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• BUSINESS INCUBATION SERVICES TO THE PRIVATE
  SECTOR
• evaluation of innovative projects and the
  entrepreneurs and management teams behind them
• strategic advice and assistance in implementing
  business projects, by devising suitable,
  high-quality business plans
• facilitating access to finance and partnerships
• helping firms to internationalise their business
  and find partners and customers in markets
  outside their area (trans-incubation)
• organising regional inter-firm cooperation
  (spin-offs, grouping companies, clustering,
  sub-contracting etc.). In this way business
  incubators help develop local innovative
  business communities
• providing specific entrepreneurial training
  programs
• monitoring the ongoing progress of the projects

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• BUSINESS INCUBATION SERVICES TO THE PUBLIC SECTOR
  
• analysis of the needs of companies on behalf of
  the regional authorities and other bodies that
  assist small innovative businesses
• implementing measures to support small businesses
  under regional, national of European Union
  development programs
• launching schemes to stimulate entrepreneurship,
  detect original projects, disseminate innovation,
  organising conferences and other events dedicated
  to the promotion of local entrepreneurial culture
  etc.
• networking with the local and regional business
  community

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• Thank You
•