Towards a co-incubation network: lessons and vision

1. Towards a co-incubation network: lessons and vision 2011 APEC Business Incubation Forum - Building A Co-incubation Network Julian Webb, infoDev Asia Pacific Facilitator CREEDA Projects Managing Director BIIA Director Julian.webb@creedaprojects.com.au

2. Contents • A bit about infoDev and their interest in a co-incubation network • Lessons and insights so far • A possible vision for the future

3. infoDev is in the World Bank Financial and Private Sector Development Vice Presidency FPD’s strategic goal is to create opportunities for investment, jobs and income through a more competitive, efficient and creative private sector, supported by safer, deeper and broader financial markets . infoDev’s Mission: To promote the growth of innovative enterprises to improve sustainable, inclusive growth, competitiveness and employment. infoDev’s Goals: Creating sustainable technology enterprises and jobs Supporting the commercialization and adoption of technologies Promoting enabling environments for innovation & entrepreneurship

4. infoDev’s methodology builds on the creativity of a global technology community Conceptualize Aggregating technology communities ghjgh Implement Design Leveraging users as co-creators in program design Linking with WBG operations to scale, replicate and transfer knowledge Pilot Piloting cutting-edge programs designed for scale

5. Harnessing a Global Network of Business Incubators, SMEs and Entrepreneurs “We need consultative support, mentoring and regional cooperation: infoDev’s support makes this possible…..” infoDev client • Results: • 350+ business incubators • 100%locally owned • 90+ developing countries • 230,000+ Jobs created Regional Networks: Asia, Africa, ECA, Middle East / North Africa, Latin America / Caribbean Global Communities of Practice: Youth, Women, ICT High Growth, Agri-business

6. infoDev-Finland-Nokia partnership: Creating Sustainable Businesses in the Knowledge Economy • A public-private partnership, launched in 2009 • 3 years, 18.5M USD • Areas of focus • Agribusiness • Mobile communications • Innovation eco-systems • SME capacity, SME internationalization • Incubating technology entrepreneurs • Three regions • Africa • Asia • Eastern Europe, Caucasus and Central Asia (ECA)

7. Training Curriculum Incubation Basics Incubation Operations Advanced Incubation Mgt 1. Definitions and Principles 3. Planning an Incubator 8. Implementing a Mentoring Program 2. Business Incubation Models & Success Factors 4. Marketing & Stakeholder Management 9. Deals & Financing for Incubator Clients 5. Financing an Incubator 10. Technology Commercialization 6. Managing an Incubator 11. Virtual Incubation 7. Monitoring & Evaluation 12. Agribusiness Incubation The curriculum consists of 11 (12) modules = 11+ days of instruction material Each module has a part 1 and a part 2 and includes examples, case studies and exercises Trainers can mix and match modules, but should not spend less than 1 day on a module For each module there is a trainer’s manual and slide deck, and a trainee’s manual

8. Quick stock take Lessons, insights and problem issues Main asset to lever is the many incubators in most countries

9. 1st International incubation services • IBIs (Accelerators in some jargon) • Focussed on international firms to help them enter specific export markets, typically when they are established domestically – i.e. at the graduation stage – e.g. IBI in Silicon Valley, Chinese IBIs • Export readiness – similar to investment readiness • Should be a part of good incubation if clients look to export markets

10. Newer developments • Softlandings • Focussed on their local market and designated as suitable for international companies • E.g. NBIA and AABI certified Soft Landing Incubators • Co-incubation • Incubating in more than one country at the same time, e.g. Shanghai/Montpellier cooperation • Integration of incubation resources and cross border collaboration

11. Improving awareness and BI:BI linkages Study tours, information, conferences, networks, e.g. EU/India Raises expectations that awareness will lead to international trade via incaubtees and graduates International networks Global infoDev regional and thematic networks www.infodev.org and www.idisc.net infoDev is developing a global service for internationalisation called Access to Finance and Markets (A2FM) GBIN, NBIA, IASP Regional AABI, APIN, APEC and other regional associations Laying a foundation, but it needs to go further… More awareness and interest in internationalisation and international networks

12. Why the interest? • To help companies enter specific export markets, typically when they are established domestically – i.e. at the graduation stage • To access international resources, e.g. MIT, Diaspora, finance, advice, personal channels to markets, e.g. China IBIs for ‘returning’ scholars • For technology transfer • High growth companies and competitiveness Is this the interest of business incubators?

13. Still searching for solutions…….. • Better expectation management – realism • Very few companies end up internationalising and it takes time • Stakeholders may have unrealistic expectations about companies exporting • Main value may in fact be in the domestic market • And it takes time and money • Results….more and more awareness, but still limited internationalisation • But exceptions, e.g. NZ • And maybe it is all working well and no-one has compiled outcome data on current internationalisation efforts? • Are current internationalization services effective? Skepticism about some current services, e.g. AABI, NBIA, EBN and other Softlanding designation, EuroOffice (EU)

14. Some Incubator programs focus on internationalization: New Zealand • 2009 Review data on 110 graduates • 60% exporting (66 out of the 110) • Total revenues: $95,823,872 • Export revenue:$44,343,934 (46% of total export revenue) • Year on year growth as incubators continue to improve

15. Incubation of NZ firms into the Indian market with a joint venture between e-Centre Ltd, a New Zealand business incubator focused on high tech start-ups based at Massey University, and CMC Limited, a large technology focused company and subsidiary of Tata Group based in India "New Zealand Trade and Enterprise is proud to support the CMCTEC initiative, which we see as a key part of providing New Zealand technology companies with better connections to the Indian market".  - Hans Frauenlob, NZTE Sector Director ICT CMC Tech: India & New Zealand Innovation

16. Business model based on a royalty on the export sales

17. Softlanding challenges • Is the Softlanding in the right location? • Markets can be very specific and businesses need to be near their customers or strategic allies • Is there any certainty the services will be appropriate and of quality? • And what services does a foreign company look for? • Does the incubator have staff with appropriate experience • To help a foreign company enter the incubators local market • To help an incubator client enter foreign markets • Noting only a minority of an incubators’ clients will internationalize

18. Softlanding challenges • Business models that allow incubators to make revenue from international services • Financial incentives needed • The right motivation • More than just renting space • Demand driven (i.e. from entrepreneurs wanting to internationalize) ORsupply driven (i.e. incubators wanting more clients and to rent space?

19. More challenges • Finance for companies to internationalize • It is costly • Finance for incubators to help companies internationalize • Ensuring companies are export ready first • Do incubators help non-incubated companies to internationalize? • Broadening the market

20. ICT challenges • Use of ICT and video conferencing • Great for communication, information and on-line support • But bandwidth issues still a problem in many parts of the world • Do technology transfer, financing and other internationalisation portals work and how? • How important is personal brokering? • They can increase productivity and efficiency and might be crucial for a co-incubation network

21. Innovation…It is very arrogant and misguided to think we have all the answers Capturing and learning the lessons What has worked? What has not worked? Realistic measurement and evaluation of outcomes and impact More challenges

22. A personal vision

23. Many incubators in most countries But limited time and international capability Existing incubators and their networks infoDev, AABI, APIN, GBIN, NBIA, EBN ++ Manager training Interest in internationalization In a way that gives unique positioning and levers regional and global networks To build on and reinforce

24. Internationalization program run by a regional/global network • International incubation by a network and not any one particular incubator • Brokering links to local incubators • To provide the services they provide to local clients as well as culture and hospitality services • Not dramatically increasing their workload • Network staff specialized on internationalization to help clients with the soft side • Coaching, mentoring, channels to markets, access to specialist strategic and marketing advice, financing, • Based in the global &/or regional offices • Most unlikely incubators will have this specialized expertise • International incubation by a network of incubators

25. Internationalization program run by a regional/global network • Services to entrepreneurs • Not only from incubators • Services to incubators • Any quality incubator and not just designated soft landing incubators • Levering iDISC and on line tools • Sourcing sponsorship and funds Needs network professional staff and office

26. Collaborating and not competing • Working with other incubator networks doing similar things globally • AABI • And its member countries • NBIA • EBN • infoDev and its regional networks (APIN in Asia) • Learning their lessons helping them succeed with their soft landing plans and certification • Working with technology transfer organizations and their portals All need to be involved in the network: AABI and APIN already have formal cooperation agreements

27. Manager training • Training of managers and staff • Train the trainer • For local delivery, adaptation and translation of material (infoDev) • Certification of managers • As a step towards incubator certification • To reinforce quality incubation and professional development Using infoDev, NBIA, AABI and other training programs

28. Incubator quality certification • Certifying incubators that meet quality criteria • For good incubation, not necessarily just internationalisation • Potentially all incubators • Needs to be simple, rigorous and not too expensive • Learning from UK, Germany, USA Not just soft landing incubators but any interested incubator

29. Early stage fund • Network has a co-investment fund • Service to entrepreneurs • Finance to internationalize • Investing as a co-investor alongside local investors • Encouraging local incubators to drive local angel investment activities • Helps address a finance gap for entrepreneurs • Services to incubators • To help get clients investment ready • To set up local angel investment networks For developing countries capitalized by IFC, Donors Early stage investment expertise in the network secretariat

30. Revenue Options • Membership • Internationalization services • Fees • Royalty on revenues or equity (sharing in success) • Funds management • Certification fees • Sponsorship Financial sustainability must be planned from day 1 Shared with participating incubators

31. Monitoring and Evaluation • To ensure continuous improvement and learning • Recognizing mistakes will be made and we don’t have all the answers • To gather data to prove it works • A big weakness at the moment • To continue to learn from entrepreneurs Network secretariat role

32. Next steps • Identify champions to lead development of the network and its internationalization aspirations • Steering committee or working party • Develop the network • Involving other networks • Engaging incubators • Develop the plan • With incubators in the network and other networks • Secure funds Focus on activities initially rather than formalizing the network

33. Thank you Julian.webb@creedaprojects.com.au www.infoDev.org www.idisc.net