Conference & award Best Practices in Science Based Incubators The Hague, 5 December 2002 Business Incubators features, policies and trends in EU Member States Jorge Costa-David European Commission Enterprise Directorate General Enterprise Directorate-General

2 Report on Benchmarking of Business Incubators Available on: ors/index.htm Highlights issues such as: Role of Business Incubators Business Incubators definitions and typology Geographical aspects and scope of incubator activities European Policy context

3 Past and Current EU policy context 2000 Lisbon European Council (invited the EC and M. States to focus their action on small and micro businesses) Commission Communication Challenges for Enterprise Policy in the knowledge driven economy Multi-annual program for Enterprise and Entrepreneurship and Green Paper on Entrepreneurship

4 Entrepreneurship at the heart of the process Business Incubators Entrepreneurship Business start ups

5 Business Incubator type (I) Traditional Business Incubators New economy incubators Other, e.g. virtual incubators (such as the Synergy Incubator - virtual service delivered through a virtual medium, the internet)

6 Business Incubator type (II) New economy incubators re private-sector, profit-driven with the pay-back coming from investment in companies rather than from rental income; They tend to focus mainly on high-tech and internet-related activities and unlike traditional incubators, do not have job creation as their principal aim; New economy incubators often have an essentially virtual presence with financial and business services at the core of the offering unlike their traditional counterparts that usually centre on the provision of physical workspace.

7 Setting Up and Operating Incubators (I) Business incubators should be designed to support and be part of a broader strategic framework – either territorially orientated or focused on particular policy priorities (e.g. development of clusters), or a combination of these factors

8 Setting Up and Operating Incubators (II) Incubators should be promoted by an inclusive partnership of public and private sector stakeholders

9 Setting Up and Operating Incubators (III) There are a number of different set up funding models but the evidence from this project is that public support for the establishment of incubators in Europe will remain critical for the foreseeable future

10 Setting Up and Operating Incubators (IV) There are different ways in which incubators cover their operating costs with many incubators relying on public subsidies, but dependence on this source of revenue funding should be minimised

11 Business Incubators functions (I) The provision of physical space is central to the incubator model. Standard good practices now exist with regard to the most appropriate configuration of incubator space

12 Business Incubators functions (II) The value added of incubator operations lies increasingly in the type and quality of business support services provided to clients and developing this aspect of European incubator operations should be a key priority in the future

13 Business Incubators functions (III) The type of activities client companies are pursuing, in particular the technology/knowledge intensity of these activities, is the key factor (rather than physical features or operating modality) that should be used to differentiate one type of incubator from another

14 Business Incubators functions (IV) Across Europe, there are a variety of different business incubator models and precise modalities should reflect local, regional and national circumstances and priorities

15 Evaluating Business Incubator services and impacts The performance of business incubators should be judged primarily in terms of the results achieved, i.e. the impact they have on businesses, wider economic development and other priorities

16 In seeking to achieve best practice particular attention should be paid to (I): Benchmarking and best practice sharing should focus on the four key incubator service areas identified in the report: entrepreneur training, business support, financing, and technology support

17 In seeking to achieve best practice particular attention should be paid to (II): Business incubators should be encouraged to periodically undertake impacts assessments As a starting point to any EU-level initiative, priority should be given to developing a set of common definitions and quality standards for European business incubators

18 Industrial Estate Business Park Science Park Managed Workshop Enterprise Centre Innovation Centre Multi Purpose Business Incubator Business & Innovation Centre Technology Centre Low MediumHigh Low Medium High Technology Level Management Support Typology of Business incubators

19 A European Definition? A business incubator is an organisation that accelerates and systematises the process of creating successful enterprises by providing a comprehensive and integrated range of support, including: Incubator space Business support services Clustering and networking opportunities By providing their clients with services on a 'one-stop-shop basis and enabling overheads to be reduced by sharing costs, business incubators significantly improve the survival and growth prospects of new start-ups. A successful business incubator will generate a steady flow of new businesses with above average job and wealth creation potential. Differences in stakeholder objectives, admission and exit criteria, the knowledge intensity of projects, and the precise configuration of facilities and services, exist and will distinguish one type of business incubator from another.

20 A Science Park is an organisation managed by specialised professionals, whose main aim is to increase the wealth of its community by promoting the culture of innovation and the competitiveness of its associated businesses and knowledge-based institutions. To enable these goals to be met, a Science Park stimulates and manages the flow of knowledge and technology amongst universities, R&D institutions, companies and markets; it facilitates the creation and growth of innovation-based companies through incubation and spin-off processes; and provides other value-added services together with high quality space and facilities. The 6th International Summit of Business Incubation and Science/Technology Park Associations held in Dortmund, Germany, November 16-18, 2002, adopted the following definition

21 A Business Incubator is an economic and social development entity designed to advise potential start-up companies, help them to establish, and accelerate their growth and success through a comprehensive business assistance program. The main goal is to produce successful businesses that will leave the program financially viable and free-standing. These graduates create jobs, revitalise communities, commercialise new technologies and create wealth for local and national economies. Other proposed definitions for discussion but not formally agreed at the summit (I)

22 Critical to the work of a business incubator is: Management that develops and orchestrates business, marketing and management resources and relationships tailored to the needs of the business clients Shared office services, training, technology support and equipment Selection of clients and an acceleration process by which businesses become more independent and progress to graduation Assistance in obtaining the financing necessary for business growth Providing access to appropriate rental space and flexible leases in the incubator Alternatively, replacing the last bullet of the above definition: Business Incubators gain added value by providing access to appropriate rental space and flexible leases in an incubator facility. Other proposed definitions for discussion but not formally agreed at the summit (II)

23 Business Incubation Programs are aimed at promoting economic development of its community by supporting start-up companies and their business development.. These programs offer services to support the establishment and development of new / small and medium companies. start-up consulting and business planning consulting in all areas important for business development and growth consulting for and/or access to financing training and networking Other proposed definitions for discussion but not formally agreed at the summit (III)

24 A Business Incubator (Business & Innovation Centre) is a physical facility aimed at promoting economic development of its community by supporting start-up companies and their business development. These centres provide as basic services: start-up consulting and business planning consulting in business development (legal, marketing etc.) consulting for and/or access to financing shared office services office and / or workshop/laboratory rooms for lease on flexible terms Other proposed definitions for discussion but not formally agreed at the summit (IV)

25 A Business Support Centre is aimed at promoting economic development of its community by supporting start-up companies and their business development and offers services to support the establishment and development of new as well as existing small and medium companies start-up consulting and business planning consulting in business development (legal, marketing etc.) consulting for and/or access to financing training Besides these general services, according to local needs and possibilities there may be other offers like or postal addresses, Internet, copier, fax, access to telephone, meeting room, exhibition hall etc Other proposed definitions for discussion but not formally agreed at the summit (V)

26 Statements agreed at the 6 th International Summit of Business Incubation and Science / Technology Park Associations in Dortmund, Germany, November 16 – 18, 2002 (I) BI and STP have become globally recognised instruments of regional economic development promotion through the support of entrepreneurship and enterprise development in a wide spectrum of environments. An important strength of both BIs and STPs is their adaptability to different situations, resources, aims and tasks.

27 Statements agreed at the 6 th International Summit of Business Incubation and Science / Technology Park Associations in Dortmund, Germany, November 16 – 18, 2002 (II) Basic mandatory components of the business incubator are: (1) entrepreneurship promotion and start-up and business planning support, (2) business development consulting, training and support, (3) networks that provide access to specialised business consulting, technology commercialisation and business financing resources, and (4) physical facilities (buildings, rooms to provide office, production or laboratory space for lease, flexibly according to the demand of client). This statement is not expressly meant to rank business incubators without physical facilities lower than business incubators with them; it is aimed at securing the clear understanding of the concept.

28 Statements agreed at the 6 th International Summit of Business Incubation and Science / Technology Park Associations in Dortmund, Germany, November 16 – 18, 2002 (III) The local and regional environments of BI and STP differ significantly (e.g., national / regional economic situation, political environment, research and development potential, short- and medium-term goals, etc.). The concrete aims, work patterns and evaluation criteria of BI and STP, therefore, should take into consideration specific situations and locations.

29 Associations agreeing with the Resolution of the 6 th International Summit of Business Incubation and Science / Technology Park Associations in Dortmund, Germany, November 16 – 18, 2002

30 Points for reflection (I) Information base about BI and STP Development of definitions (commonly agreed) Improving understanding Variety of BI and STP is decisive for success BI and STP must continuously improve quality of services

31 Points for reflection (II) Benchmark development Toolboxes Certification/accreditation Interaction between local level/knowledge Information / Experience

32 Business Incubators Database (I)

33 Business Incubators Database (II)

34 Business Incubators Database (III)

35 Business Incubators Database (IV)

36 Business Incubators Database (V)

37 Business Incubators Database (VI)

38 Business Incubators Database (VII)

39 Business Incubators Database (VIII)

40 Business Incubators Database (IX)

41 Business Incubators Database (X)

42 Business Incubators Database (XI)

43 Business Incubators Database (XII)

44 Business Incubators Database (XIII)

45 Business Incubators Database (XIV)