An Introduction to Business Incubation © BrainWorks

Definition Business incubators provide intensive, hands-on support and services to nurture young firms, helping them to survive and grow during the start-up period when they are most vulnerable. The services include shared office services access to equipment flexible leases and expandable space help with business planning raising finance professional services (accounting, IP etc.) marketing support mentoring access to networks © BrainWorks

Diffusion of Incubators USA 1980 = 12 2000 = 800 UK 1996 = 25 2001 = 150 SA 1998 = 0 (Ignoring some “low tech” initiatives) 2002 = 12 © BrainWorks

Typical incubator… (UK study) 91% of incubators provided physical space to their client companies 31% of respondent incubators are located on science parks; 24% are based on industry parks; and 24% are close to/on a university campus The average size of an incubator in the UK is 3900sqm (ranging from 65sqm to 13000sqm Most (64%) incubators would describe themselves as being "sector specific". Of the named sectors, "Technology", "Biotech", "Knowledge-based", "IT" "Software" and "E-business" were the most frequently cited sectors Management team average six full time equivalents Most are “not-for-profit”. At the height of the dot.com boom there were an number of commercial incubators – most now closed/refocused. © BrainWorks

Aims of Sponsors Create jobs Revitalize neighborhoods Commercialize critical new technologies Strengthen local and national economies Address other development issues (e.g. BEE) Make money from portfolio companies (??) Godisa specific – to address: Outdated technology used by many SMMEs Poor (or non existent) technology support to SMMEs Very low entry rates of SMMEs into the productive “value added” sectors High failure rates amongst start up SMMEs Poor access to facilities for the testing and promotion of innovative ideas © BrainWorks

SA Incubators Technovent (CSIR) Mixed (1999) Bandwidth Barn (Cape Town) IT (2000) Innovation Hub (CSIR) IT/Mixed (2001) Softstart (CSIR) IT (2001) EgoliBio (CSIR) (Biotech, Life Sciences) (2001) Zenzele Tech. Demo. Centre (Randburg) Mining (2001) Acorn Technologies (Cape Town) Medical Devices (2002) Chemin (Port Elizabeth) Fine Chemicals (2002) Bodibeng Technology Incubator (Midrand) ICT and Electronics (2002) Timbali Technology Incubator (Nelspruit) Floriculture (2002) Upstarts (part of HBD) Blue Catalyst © BrainWorks

Incubator Value Add Office space to rent on flexible terms Low A PRIORI VALUE High Bricks and Mortar Incub- ators Low VALUE A POSTERI High Virtual Emphasis Office space to rent on flexible terms Office productivity infrastructure Meeting, training and conference facilities Access to professional services Business coaching and mentoring Access to valuable networks © BrainWorks

Choosing an Incubator What Sector are you in? Where is it located? What are you looking for – office space, advice, tools, the atmosphere??? What are the terms? Office space will probably be “sold” on flexibility rather than price etc. Speak to other tenants and “graduates” Who is the management – what are their credentials? Are they linked to financial institutions (VCs) What are the programmes, how do you graduate? © BrainWorks

Some Contacts www.godisa.net - Charles Wyeth www.upstarts.co.za – Philip Marais www.bluecatalyst.co.za - ? www.theinnovationhub.com - Jill Sawers © BrainWorks