SCIENCE/TECHNOLOGY PARKSAND BUSINESS INCUBATORS: IDEAS & GENERALPRACTICES

Raivo Tamkivi

Poland May 2009

Projekt współfinansowany ze środków Unii Europejskiej w ramach Europejskiego Funduszu Społecznego

TERMINOLOGY

Actually quite hectic but let’s try:

Innovation = development process of a new market-capable product/service. Also: such a product/service itself.

NB! Not necessarily connected to R&D, although often it is.

But “innovation” is also often used in much wider meaning.

R&D commercialization: complex of linked activities during which R&D results are developed into products/services that satisfy certain market demands.

Technology Transfer: movement of intellectual capital and know-how between R&D, business and other organizations with the goal to create and develop market-capable products/services.

SCIENCE vs BUSINESS: GOALS and INTERESTS

Main problem: matching and harmonization of those

for the “classical” STP partners - R&D (universities)

and enterprise, the objective paradigms and

development logics are different, even contradictory:

Success criteria Disturbing factors

R&D

Extension of knowledge

Results are new, complete, perfect and cross-checked

Citation index and other forms of recognition

Need for application or commercialization

Speed, external pressure

Economy of costs

Enterprise

Profit (means: ~sales)

Speed, flexibility

Economy of costs

Drive for perfection

Non-predictability

Academic thoroughness

ENVIRONMENT (1)

Possibility and success of innovation processesdepend on environments:

political/administrative – priorities, programmes, legislative background, public opinion, effectiveness and flexibility of institutions, etc;

financial – availability of: public and/or privategrants, start-up-, seed and venture capital, bankloans, collaterals, etc ;

academic – profile and entrepreneurial attitude of universities/R&D bodies, and of research community as a whole;

cooperation background – entrepreneurial attitudes in the society and its sub-structures, development level of the (ICT) infrastructure, etc;

ENVIRONMENT (2)

Possibility and success of innovation processes most

of all depend on existence and development level of

practical innovation support structures, like:

public (innovation-oriented) funds,

Science/Technology Parks,

Business (incl Technology) Incubators,

Innovation Centres

university industrial liaison/technology

transfer offices,

regional development agencies,

business and industrial parks,

etc., etc….

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.

IAS

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Istanbul, Turkey. Nov 2006

Val. ad. services

Management

Knowledgesources

Company creation

Quality space

Company attraction

Territorial influence

Evolution of STPs

CaliforniaRest of

The USAEurope

Japan

Asia-Pacific

Latin America

´50 ´60 ´70 ´80 ´90

Terminology

• Technology Park

• Science Park

• Science and Technology Park

• Technopole

• Research Park

• Technology Centre

• Science City

• Learning Village

• ...

Common features of all

these “labels”

WhatSpace+infrastructures / property-

based scheme

For

whom

•Knowledge-based firms (KBF)

•Technology-intensive activities

Why

•Assisting the growth of KBF

•Stimulating technology transfer

How

•Bringing research results to the

market place

•Providing added value services

IASP - Main figures

Founded 1984

350 members

72 countries

200,000+ companies

6 Divisions: Europe, Asia-Pacific, Latin America, West Asia, North America, Africa

HQ – Malaga (Spain)

25 World Conferences

43 regional conferences

Science/Technology Parks: recent trends (1)

Without loosing their basic functions:

Specific property-based instrument

for R&D commercialization support

Serving community and generating wealth

through

innovation culture & competitiveness

around year 2000

Science/Technology Parks: recent trends (2)

devotion to regional development: quality

environment not just for business but…

“Learning Villages”

special emphasis on cluster formation,

integration with and support to community

needs and social problems education,

employment, culture and recreation,

an interesting trend: suburban U-campuses

City centres regeneration of City’s

physical and service networks, etc.

Science/Technology Parks: key issues (1)

S/TPs are for enterprise and business, not

for science and technology

There is no real S/TP without affiliated

university or other R&D institution

Ignoring these terminological mess, “TP” misused (Univ.Dept.,

…, Bus.Park) distortion of focus of stakeholders etc., confusion

of the role of public support

The core essence of a S/TP are value-

adding tenant services, not property and

infrastructure development

Science/Technology Parks: key issues (2)

The main function and value of university in a S/TP is to serve as a pool of expertise to commercialise the combined input from

international R&D and TechTr networks,highly-qualified people to amplify the development of knowledge-based enterprises, and also a direct source of commerciable R&D results

These may also seem trivial, but…

S/TP in itself a macroeconomic actor ormassive provider of new jobs, but rather atrigger of the respective desired results.

Remark on Business Incubation:

Definition somewhat problematic, perhaps the most

inclusive definition comes from New Delhi Summit 2004 :

The (wider) business incubation environment is the wider

context which should be conducive to the sustainable

nurturing of growth potential and the development of

enterprises.

Business incubation is a public and/or private,

entrepreneurial, economic and social development

process designed to nurture business ideas and start-up

companies and, through a comprehensive business

support programme, help them establish and accelerate

their growth and success.

The business incubator is a physical space or facility that

accommodates a business incubation process.

UNIVERSITY and STP/TBI : some key issues (1)

Long-term world-wide practice => there can´t be a

real STP/TBI without close link to an university.

Among all possible strategic founders, partners or

stakeholders of a STP/TBI university is almost

always the most stable ally of STP with the

biggest number of overlapping interests.

At the same time, the main missions, visions,

goals and tasks of university and STP/TBI are

naturally different – this must be taken into

account in a mutually respectful way.

The roles and mutual relations of universities and

STP/TBIs are in dynamic change.

UNIVERSITY and STP/TBI: some key issues (2)

The core essence of university-STP/TBI

cooperation: overcoming/minimising the above-

described natural contradictions between science

and business.

There are some especially sensitive areas

where interests of university and STP/TBI can

easily collide a special attention and careful

division of function is needed in:

- IPR handling and protection,

- development of university spin-off companies,

- relations with big technology enterprises.

Science/Technology Park services (1)

Physical Infrastructure Services

Rent of rooms, workplaces and equipment

Communication and other technicalnetworks, maintenance of these

Conference and meeting facilities

Secretarial, accountancy, copying etc. officeservices

Catering, recreation/sports and social life

…..

Science/Technology Park services (2)

Incubation Services

see below ……

Science/Technology Park services (3)

Business Development Services

Marketing, finding cooperation partners

Technology transfer: info, advice, brokerage

Special advisory/training (internationalization!)

Search for funding: VC, loans, grants

Mediation of quality workforce/subcontracting

Mediation of R&D-services

PR and image support, publications, design

Quality development/management

…..

Science/Technology Park services (4)

Cooperation Networks

Information about events, services, supportstructures, etc.

Organisation of contact events or ofparticipation in these

Participation in international cooperationnetworks, links with other parks/centres

Development of innovation support staff

Attraction of students to entrepreneurship

Synergy creation among tenant companies

……………….

Incubation in Science/Technology Parks (1)

Mission: to reduce the risks in start-up and early

development stages of knowledge-based innovative

businesses by providing advantageous business and

working environment with services and equipment, and

flexible use of premises.

Conceptual goals:

creation of new innovative businesses, ensuring their

viability and growth resulting in new good clients for the

whole STP;

creation of new jobs (especially those requiring high

qualification);

creation of an output for the applied researchers and

students into business.

Incubation in Science/Technology Parks (2)

Differently from STP as a whole which is expected to make

profit in the long term, the Incubator’s commercial goal

should be “operational sustainability” via reaching the

critical mass of incubants during a certain period of time.

There are various strategies and financial schemes for operating

technology incubators, which are generally based on the readiness

and interest of public and private sectors in certain societies and

economical environments. Two main types of such strategies:

1) Rents/service fees are adjusted to what the the incubants can afford;

discounts are based on cross-subsidising inside the STP and/or on

extra money coming to STP from outside (mostly from public sector);

2) Emphasis is put on the high-quality of services, afforded by the

incubants thanks to the available financial support from public sector

that comes to the incubation projects/companies, not the STP itself.

Undoubtedly the the 2nd option is preferable – the Incubator is managed

in a natural market environment – but ….

Incubation in Science/Technology Parks (3)

Incubator should be an autonomous and physically limited part of the STP

– transparency is needed for both public and private investors. A tricky

question: should Incubator be a separate legal entity? Depends on

particular situation, esp. on the financial buildup of the STP.

Some other tips:

The problems related to intellectual property rights better be resolved

before incubation starts.

Incubation managers should have personal experience in starting and

running a SME, good communication and foreign languages’ skills.

STP should avoid acquiring shares in the companies/projects started

or developed under its roof.

The premises offered in the Incubator should be maximum flexible as

(movable interior walls, etc.) often changes among incubants.

No preferences or benefits should be based on technological fields.

Special attention to the cooperation and synergy of the incubants:

joint projects, training, informational and club events, etc.

Take a maximum use of surrounding STP!

Incubation in Science/Technology Parks (4)Main sources of incubants are: spin-off from universities, R&D institutions and other enterprises;

customer databases of other enterprise and innovation support bodies;

open incubation competitions (announcements in the press),

networks of business organizations, consultants, other service providers,

direct mailing and individual sales,

directed seminars and other contact events (days of open doors, etc.)

The primary selection criteria: the project involves new knowledge-

based or technological element, exceeds the general local level and

is oriented to growth.

Another tricky question: the length of the incubation period? Good to

use X+Y schemes. The ideal case: a successful incubant moves to the other

parts of STP – can be stimulated by offering “transfer packages” to make the

change easier.

The incubation services should be tailored to enable starting businesses:

concentrate mainly to their basic activities;

economize costs (so-called 'shared services' effect');

improve their effectiveness and flexibility;

evaluate adequately perspectives and catch attention of the

important outsiders.

Specific Incubation Services

Search for potential technopreneurs and marketable R&D projects, evaluation & analysis their ideas and capacities;

Primary entrepreneurial training and consulting to develop a business plan (pre-incubation);

Help in feasibility and market studies, in founding a company, compiling various application papers, etc.;

Follow-up monitoring and emergency consulting to follow and develop the business plan, long-term mentoring;

Specialized trainings, incl. in ICT applications;

Mediation of specialized legal, financial, tax-related, IPR-related, etc advice;

Creation primary contacts with potential market, partners, and start-up financing, assistance in foreign relations;

Mediation of technology expertise, help in prototyping etc.

……

Physical Infrastructure Services

Rent of rooms, workplaces and equipment

Communication and other technical networks, maintenance of these

Conference and meeting facilities

Secretarial, accountancy, copying etc. office services

Catering, recreation/sports and social life

Non-Specific Incubation Services:

Business Development Services

Marketing, finding cooperation partners

Technology transfer: info, advice, brokerage

Special advisory/training (internationalization, quality management, etc.

Search for funding: VC, loans, grants

Mediation of R&D-services, quality workforce/subcontracting

PR and image support, publications, design

Cooperation Networks

Information about events, services, support structures, etc. Organisation of contact events or of participation in these

Participation in international cooperation networks

Synergy creation among tenant companies

Seed & Venture Capital & Business Angelship

are extremely important instruments in the toolbox

of a Science/Technology Park. But:

• these are professional sciences by itself, sic!...

• money is often not what is needed first,

• own money and FFF must be used,

• public funding helps but can reduce VC chances,

• no chance without detailed literate business plan,

• training of presentations/pitches is vital,

• as wide S&VC&BA network as possible,

• at 1-2 locally involved VC actors are essential,

• individual approach rather than events!

Last not least, some remarks about VC

Projekt współfinansowany ze środków Unii Europejskiej w ramach Europejskiego Funduszu Społecznego

THANKS FOR YOUR

ATTENTION!

Raivo Tamkivi