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“ Innovation & Entrepreneurship (I&E) ”

“ Innovation & Entrepreneurship (I&E) ”. "Asia and The Pacific Incubator Conference". Some thoughts & ideas from the Indian experience & perspective by. Harkesh Mittal, Adviser & Head

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“ Innovation & Entrepreneurship (I&E) ”

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  1. “Innovation & Entrepreneurship (I&E) ” "Asia and The Pacific Incubator Conference" Some thoughts & ideas from the Indian experience & perspective by Harkesh Mittal, Adviser & Head National Science & Technology Entrepreneurship Development Board, & National Innovation Project Government of India

  2. How we did Technology Business Incubation at our S & T Parks ? ???

  3. Time travel to 1982………….

  4. INCUBATOR MANAGER SCIENTIST TECHNOLOGIST POLICY MAKER Initial Years (1982-1990) !!!!

  5. STABILITY, MAINTAIN STATUS, EQUILIBRIUM GROWTH, CHAOS, DIVERGENT, UNCONVENTIONAL WE NEED BOTH POLICY MAKER’S PERSPECTIVE

  6. POLICY ENVIRONMENT IN A DEVELOPING COUNTRY CONTEXT IN THE WORLD AT LARGE DECISION MAKING HAS TO BE CONSISTENT. AND LINEAR PROCESSES OF GOVERNANCE EXIST. THAT MEANS DECISIONS NEED TO BE CONSISTENT WITH WHAT WAS TAKEN YESTERDAY, A MONTH BACK, A YEAR BACK & A DECADE BACK…… WE VERY POLITELY CALL IT BUREAUCRACY BUT THERE EXISTS THIS WORLD OF THEIR OWN OF INNOVATORS & ENTREPRENEURS WHO HAVE TO THINK & ACT DIFFERENTLY EVERY TIME, EVERY DAY

  7. WORLD OF INNOVATORS & ENTREPRENEURS INCUBATORS OPERATE HERE SUPERFICIAL TENSION POLICY ENVIRONMENT IN A DEVELOPING COUNTRY CONTEXT

  8. Global Problems Local Solutions, (valves) Local Problems Global Solutions, (TB) Local Problems Local Solutions, (RFID) India Innovates……

  9. IDEA MENTORS INNOVATIVE FINANCE POLICY TEAM NETWORKS SERVICES ……..PIECES OF THE INCUBATOR JIGSAW PUZZLE

  10. IDEA MENTORS INNOVATIVE FINANCE TEAM NETWORKS SERVICES POLICY AN IDEAL BUSINESS INCUBATOR

  11. WHY DID WE SUPPORT BUSINESS INCUBATION/ S&T PARKS ?

  12. FORMULA FOR SUCCESS: A + B + C + D + E = SUCCESS UNKNOWN

  13. THAT MEANS THAT WE IN A HIGH RISK SITUATION • OUR IDEA, ENTREPRENEUR, SYSTEMS ETC. ARE NOT READY TO FACE THE REAL WORLD YET • WE THEREFORE NEED ENABLING MECHANISM • AND INCUBATORS/PARKS ARE ONE OF THEM ?? • THE BENEFITS ARE MANY….. WILL COVER TOWARDS THE END. It’s not the destination, it’s the journey……….

  14. INDIAN EXPERIENCE

  15. INDIA AT A GLANCE……. Source:CSO Statistics

  16. Emerging World • India is globalising, the world is going thru a major change • Resulting in a “borderless world” where seven I’s freely flow Investments, Industries, Information, Ideas, Innovations and Individuals INDIANS

  17. INDIAN INNOVATION SYSTEM AND LINKAGES ECONOMIC PRESSURE FOR SURVIVAL AND GROWTH IN GLOBAL ECONOMY New Product Development in New Institutional Arrangements Productivity Improvements and New manufacturing Processes Commercial & International Orientation of National R&D ENTREPRENEURIAL LEADERSHIP Consulting Companies Geographical Clustering Venture Capital Emergence & Growth Of Indian Software and ICT Companies Growth of Engineering and IT Education Provision of IT Enabled And Other Services NEW OPPORTUNITIES IN THE WORLD ECONOMY Source:R.T.Krishnan

  18. ENABLING ENVIRONMENT IN INDIA • CHANGING MIND SET, SKILL SET & DOMAIN KNOWLEDGE OF TECHNOLOGY & ENTREPRENEURSHIP • CULTURAL CHANGE STARTED “ BUSINESS FAILURE GETTING DECOUPLED FROM PERSONAL FAILURE” BOOT CAMPS PROMOTING E’SHIP • BRAIN GAIN ( NEXT GENERATION OF NRIs FAMILIAR TO BOTH THE CULTURES), TELECOM INFRASTRUCTURE ONE OF THE BEST IN THE WORLD, IP PROTECTION & GOVT. POLICIES PROVIDE THE RIGHT ENVIRONMENT. • NEW HIGH TECH CLUSTERS AFTER BANGALORE AT HYDERABAD, CHENNAI, PUNE ……

  19. ENABLING ENVIRONMENT IN INDIA …….contd. • HIGH END ROLE MODELS “RAGS TO RICHS” STORIES, • EMERGING SECTORS e.g PHARMA, LIFE SCIENCES, MATERIAL, DESIGN, ICT WITH DOMAIN KNOWLEDGE EXPERTS. • MULTI NATIONAL FIRMS ENCOURAGING & TAPPING INNOVATIVE IDEAS THROUGH BUSINESS PLAN COMPETITIONS. INTEL, IBM, MICROSOFT, LOCKHEED MARTIN ETC. IN ADDITION TO OUR OWN. • BOTTOM UP APPROACH WHERE INNOVATION AND TECHNOLOGY ARE LOCALLY DEVELOPED.

  20. LINKING: EDUCATION…… …..INNOVATION……. ……ENTREPRENEURSHIP

  21. EDUCATION vs. INNOVATION Innovative potentials Education levels

  22. EDUCATION vs. ENTREPRENEURSHIP NB OB DEGREE OF ENTREPRENEURSHIP Education levels

  23. High Japan Silicon Valley Sweden Israel U.K. Innovation INDIA Hong Kong Low Low Entrepreneurship High INNOVATION VS. ENTREPRENEURSHIP

  24. -2 Mn -17Mn -0.5 Mn -10 Mn Iran Australia 3Mn 47Mn India Future Opportunities for Business Incubation in India Potential surplus population in working age group (2020) Germany -3 Mn UK Russia Czech Republic 0Mn -6 Mn -1Mn Turkey Ireland Iraq 2Mn China -3 Mn France Israel US -9 Mn Japan 2Mn Pakistan Spain -3 Mn 0Mn -2 Mn 5Mn 19Mn Philippines 7Mn Italy Bangladesh 5Mn 4Mn Egypt Mexico 4Mn Vietnam 1Mn Malaysia 5Mn 3Mn Indonesia Brazil Note: Potential surplus is based on the ratio of working population (age group 15 – 59) to total population constant; Source: U.S. Census Bureau; BCG Analysis

  25. NUMBER OF BUSINESS INCUBATORS & SCIENCE PARKS IN INDIA

  26. STEP/TBI LOCATIONS TBI STEP • IIT- Roorkee • JSSATE-Noida • HBTI-Kanpur • GNEC-Ludhiana IIM, NID, NIRMA, AHMEDABAD IIT-BOMBAY PUNE UNIV. , MITCON, PUNE NSIC-RAJKOT • IIT KHARAGPUR • ICICI KP, ICRISAT, HYD • Anna .Univ. Chennai • PSG Coimbatore • KEC-Perundurai • VIT-Vellore • NIT- Calicut CDC-BANGALORE BEC-BAGALKOT SJCE-MYSORE NITK-SURATHKAL NIT Trichy VIT, Vellore NIT-Calicut

  27. Profile of Indian S&T Park/Incubator • Average Project cost : USD 1mn • DST Contribution : 50- 70% • Average number of tenants : 8-10 • Average Tenancy period : 2 years • Successful Enterprises : 5 per annum • Survival rate of start-ups : nearly 70% • Legal Status : Part of host Institute/ not for • profit registered society • Self sustainability : 5-6 years

  28. INCUBATION SYSTEM • Focus on IT , BT, Design, Agribusiness, Environment, Engg, New Materials • Primary target : Academic and R& D institutions • A mission mode activity targeting 5 new TBIs every year • Different models being tried

  29. GOVERNMENT SUPPORT TO INNOVATION AND ENTREPRENEURSHIP • Technology Development Board( TDB)- Encourages development and commercialization of indigenous technologies and adaptation of imported technologies PROVIDES SOFT LOANS • Programme Aimed at Technological Self Reliance(PATSER)- Financially supports industry’s efforts in development of indigenous technologies • Technopreneur Promotion Programme (TePP)- Supports individual innovators for prototype development/processes • Home Grown Technology Program( HGT)-Assists in commercialisation of indigenous technologies • National Innovation Fund: For grass -root innovators • Technology Development Fund for Biotechnology • Pharmaceutical Research and Development support Fund

  30. Target Segment Bio-IT Park Integration & Knowledge Exchange Industry Flow of Capital International Knowledge/ Tech Collaborations Investor Community Research Institutes & Universities Government & Support Agencies Nurturing & Policy Support Flow of Knowledge Mixed Initiative- Setting up of Bio-IT Park Department of IT and Dept of Biotechnology have envisaged the creation of a Bio-IT Park and STPI has been entrusted as a nodal agency for this purpose. The park is proposed to be in the form of a Public-Private Partnership model.

  31. Ist G F B I INCUBATION FUND • AN INCUBATION FUND RS 10 M (US$230,000) GIVEN TO 10 INCUBATORS AS GRANT FOR • SUPPORTING EARLY STAGE START-UP COMPANIES IN THE INCUBATOR • THIS FUND TO BE USED AS LOAN OR EQUITY IN THE COMPANY BY THE INCUBATOR • THE REVENUES ON THE FUND WILL BE PLOUGHED BACK TO THE FUND FOR FUTURE SUPPORT

  32. IInd G F B I FISCAL INCENTIVES & SERVICE TAX EXEMPTION • THE INCUBATOR AND INCUBATEES GET SERVICE • TAX EXEMPTION IN 2007-08 BUDGET • Exemption of Service Tax on all services provided by the Incubator • Exemption of Service Tax for the incubatee for three years Provided the business turnover does not exceed Rs 5 m (US$115,000) • Modification in Act to allow incubators to hold equity.

  33. INCENTIVES FOR STPI INCUBATEES • Approval under single window clearance mechanism • 100 per cent foreign equity permitted • Imports in the STP units are completely duty free • Exemption of local taxes for domestic purchases • The sales in the domestic market are permissible up to 50 per cent of the exports • Exemption from corporate income tax for a block of 10 years • Minimal export obligation with positive Net Foreign Exchange

  34. GOVERNMENT INSTITUTIONS SUPPORTING ENTREPRENEURSHIP AND BUSINESS INCUBATION • Ministry of Industry • Ministry of Science and Technology • Ministry of Information technology • Financial Institutions • Ministry of Human Resources Development • State Governments

  35. The Biotech Park Policies • Benefits enjoyed by Export Oriented Units (EOU) extended to Biotech Parks • 100% FDI permitted through automatic route • BTP units exempt from payment of Income Tax • Export proceeds to be realised within 12 months • BTPs allowed to retain 100% export earnings in the EEFC account

  36. KEY LESSONS LEARNT …… • A STRONG R & D AND INNOVATION BASE IS DESIREABLE FOR A INCUBATION PROGRAMME. • MATCH THE INSTITUTIONAL STRENGTH, THE ENVIRONMENTAL STRENGTH FOR SUCCESSFUL INCUBATION PROGRAMME. • DEVELOP A CLASS OF MANAGERS AND THE INCUBATION MANAGER SHOULD BE GOOD GOD. ENABLE HIM TO SPEND MORE TIME WITH CLIENTS. COMPENSATE HIM/HER SUITABLY. • CREATE EARLY STAGE FUNDS WITHIN THE INCUBATORS

  37. KEY LESSONS LEARNT …… CONTD. • BUILD MUTUAL LEARNING & NETWORKING SYSTEMS • PROVIDE OPERATIONAL AUTONOMY & FLEXIBILITY TO INCUBATOR/PARK • PROVIDE LINKAGES WITH INNOVATION PROGRAMMES • SET REALISTIC AND PRAGMATIC TARGETS, DON’T RAISE THE EXPECTATIONS PARTICULARLY OF POLICY MAKERS • A SUPPORTIVE AND PARTICIPATORY MANAGEMENT. TREAT INCUBATOR AS A DYNAMIC VENTURE ITSELF. • BUILD A REVENUE MODEL EQUITY, DEFERRED PAYMENT, SWEAT EQUITY, POOL COMPANY ETC. • BUILD MENTOR NETWORKS WITH FACILITY TO PARTICIPATE.

  38. SOME THOUGHTS TO SHARE ….

  39. LOW TECH HIGH TECH VS.

  40. IT IS ANY TECH THAT MAKES BUSINESS SENSE WHAT TECH IS OUR CORE COMPETENCY ? IT, BT, NT, DESIGN, MANAGEMENT, INFRASTRUCTURE ETC. IT ACTUALLY DOES NOT MATTER WHAT TECH IT IS…… ENTREPRENEURSHIP IS NOT INNOVATION; NOR IT IS TECHNOLOGY IT IS MONETIZING THESE……..

  41. IS IT MAGIC ??? IS IT LOGIC ??? OR

  42. Business Incubators Performance Business Incubators Performance Intellectual Infrastructure Physical Infrastructure Cultural Infrastructure Financial Infrastructure Innovation & Entrepreneurship Education Training Skills Knowledge Networks Research Institutes Social Vision and The Will Connectivity to New markets and Others Risk Culture Innovation Ambience Venture Mind Social Recognition & Reorgiztn Venture Fund Innovation Fund Incubation Fund Project Fund Tech. Dev. Bridge Fund Incubator, the Higher Order Orgnanization : Logic Vs Magic Business and Social Environment

  43. Innovation : New products / processes Human Development I n v e s t m e n t J o b s 3 0 0 p e r m l n . After 5 to 7 years Tax Revenue to Governments ( Profit, Turnover, Manufacturing Taxes) BI Investment Technology Business Incubators Profile Regional Development Community Government & Society

  44. HOME WORK HARD WORK SMART WORK TEAM WORK NET-WORK SUCCESSFUL BUSINESS INCUBATORS REQUIRE ONLY SOME sum OF THIS ……………WORK

  45. THANK YOU www.nstedb.com www.techno-preneur.net www.incubatorsnetwork.com www.dst.gov.in

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