conference & award best practices in science based incubators the role of business incubators in...
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Conference & awardConference & awardBest Practices in Best Practices in
Science Based IncubatorsScience Based Incubators
The role of Business Incubators in post-2006 EU The role of Business Incubators in post-2006 EU What are the prioritiesWhat are the priorities
Jorge Costa-DavidJorge Costa-David
European Commission European Commission
Enterprise Directorate GeneralEnterprise Directorate General
Enterprise Directorate-General
Oxford, 10 December 2004Oxford, 10 December 2004
2
The context (I)The context (I)
Lisbon objectives (EU Council 2000 invited the EC and M. States to focus their action on small and micro businesses)
• 24 million SMEs in Europe 25 2/3 of total private employment average size : 6 persons
European Charter for SMEs Open method of co-ordination « Think small first » and « SME Envoy » Entrepreneurship agenda
1. Entrepreneurship Green Paper
2. Entrepreneurship Action Plan
3
The context (II)The context (II)
• Wider EU• Kök report
– Blaming, Shaming, Faming– Fewer priorities, more focus– National (M. State specific) action plans
• Reactions to all the above• EC DG Enterprise and its main functions• New Commission (as of 22 November
2004)
4
Enlargement: Key Facts
As from 1st May 2004
• Larger/est Integrated Market in the World
• EU 25 : 450 Mio Inhabitants 25 Mio Enterprises
• Implementation of the ‘ Acquis Communautaire ’
• Economic Prospects
5
Challenges/Opportunities
• Strengthening Competitiveness in Candidate Countries
• Entering New Markets• Investment Opportunities
• Clustering, Networking, Industrial Co- operation
• Sustainable Development
6
CHALLENGES FOR ‘ACCESSION’ AND CANDIDATE COUNTRIES
• Private business activity has grown very fast in CCs during transition to market-oriented systems
• SME sector less developed than in EU member states → however, strong latent potential for entrepreneurship
• Very small businesses → need for policies, access to finance and business support to encourage the transformation of self-employed and microenterprises to larger companies
• Limited knowledge of the demand for finance among SMEs in the CCs → however, latent demand potentially important
• Supply of finance to SMEs in the CCs different than in EU countries → commercial banks not aware enough of SME needs
7
Strategic goal of Lisbon (2000)
• “to become the most competitive and dynamic knowledge-based economy in the world…
• … capable of sustainable economic growth with more and better jobs and greater social cohesion.”
Role of the European Commission
8
The European Charter for Small Enterprises
Charter for Small Businesses of June 2000 commits Member States and the Commission to create “the best possible environment for small enterprises”.
Erkki Liikanen said “Charter is central to achieving the Lisbon goal of making Europe into the world’s most competitive and dynamic knowledge-based economy by 2010”
9
Charter Action Lines (I)
• Education and training for entrepreneurship
• Cheaper and faster start-up
• Better legislation and regulation
• Availability of skills
• Improving online access
• More out of the Single Market
10
Charter Action Lines (II)
• Taxation and financial matters
• Strengthen the technological capacity of small enterprises
• Successful e-business models and top-class small business support
• Develop stronger and more effective representation of small enterprises’ interests at Union and national level
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Central objective of the Charter
“Create top-class small business support systems, easy to access, to understand and relevant to the needs of business”
12
I. Awareness and visibility - results
75% of EU small business lack information on the availability of support services
Better take up of support services by female entrepreneurs and by entrepreneurs with secondary and university education
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I. Awareness and visibility - results
0%
5%
10%
15%
20%
25%
30%
35%
40%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Information rate
Par
ticip
atio
n ra
te
Greece
Sweden
Netherlands
Ireland
Italy
Norway
Germany
Denmark
Belgium
Finland
United Kingdom
P ortugal France
Austria
Spain
percent of enterprises
percent of enterprises
EU-average
Graph 1: Information and participation rates of businesses
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I. Awareness and visibility - results
Main reason for 60% of enterprises not to make use of support services: “they do not see any need for external help”.
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I. Awareness and visibility - results
60%25%
9%6%
no need for external help
no awareness
wrong kind of content
not offered under the right conditions
Graph 2: Main reason for not using support services
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I. Awareness and visibility - conclusions
Two main factors influencing awareness
• Promotion of support services– Direct contacts and personal visits - most
welcome promotional methods– Word-of-mouth
• Organisation of contact points– looking for support services at local / regional
levels
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I. Awareness and visibility - conclusions
KEY CHALLENGES OF SUPPORT POLICY
• Promotional tools should focus on direct and personal contacts
• Co-ordination between service providers
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II. Types of support - results
• EU Small businesses need specifically targeted support services – 70% according to their size; – 77% to their sector and – 73% according to their phase of development
• There seems to be a certain mismatch between demand of services and offer in Europe
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II. Types of support – results (II)
• Regional differences as far as enterprises’ needs are concerned
• Demand for support services related to the development of the business location
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II. Types of support – conclusions (III)
KEY CHALLENGES OF SUPPORT POLICY
• Small business need more tailor made support and more targeted services
• Coherent support services in the area of professional information and finance
• Demand for specific types of support differs by the location of an enterprise
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III. Conditions and Delivery - results
65 70 75 80 85 90
quality of service
professionalism of staff
effect on business
pricing policy
communication with provider
understanding of business
access to service
EU
Graph 5: Satisfaction with use of support services
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III. Conditions and Delivery – results (II)
15%
20%
25%
30%
35%
65% 70% 75% 80% 85% 90% 95%
Satisfaction rate
Part
icip
atio
n r
ate
Netherlands
Ireland
Germany
Denmark
Belgium
Finland
United Kingdom
P ortugal
France
percent of enterprises
Spain
percent of enterprises
EU-average
Graph 6: Satisfaction and participation rates
23
Objectives of 2001-2005 Multi-Annual Programme for SMEs
• Promote entrepreneurship • Enhance growth and competitiveness• Improve administrative and regulatory environment• Improve financial environment• Facilitate access to Community support services and
networks• Contribute to the « open method of coordination »
- Exchange of information - Identification of best practices- Implementation and monitoring
DG Enterprise main functions
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Enterprise Policy Main ActivitiesEnterprise Policy Main Activities
REGULATORY FRAMEWORKREGULATORY FRAMEWORK
Action Plan on Regulatory Environment(2002)
COMPETITIVENESSCOMPETITIVENESS
Competitiveness Report (annual), specific issues: Manufacturing industry (2001) ICT (2001) Biotechnology (2001) Services (2002) Competition (2002) Sustainable development (2002)
ENTREPRENEURSHIP & INNOVATIONENTREPRENEURSHIP & INNOVATION
Charter on small enterprises
Scoreboards
Benchmarking
Lessred tape
ImpactAssessment
Entrepreneurship Green Paper/Action Plan
Innovation (annual) Enterprise Policy (annual)
Minimum standards for consultation
Communication on impact assessment
DG Enterprise main functions
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Policy areas mentioned by respondents
A) Continued efforts needed
1. Administration and regulation
2. Access to finance
3. Support and training services
4. Innovation
5. Facilitating transfer of businesses
6. Entrepreneurship education
7. Attitudes towards risk-taking and failure
European agenda for European agenda for EntrepreneurshipEntrepreneurship
26
Policy areas mentioned by respondents
B) More efforts needed
1. Social security for entrepreneurs
2. Public procurement
3. State aids
4. Taxation
5. Labour law complexity and inflexibility
6. Internationalisation
7. The regional dimension
European agenda for European agenda for EntrepreneurshipEntrepreneurship
27
Suggestions about the approach
A co-ordinated approach to entrepreneurship policy
Involving policy-makers at EU, national and regional level as well as businesses organisations
Ensuring synergy among different policy areas that affect entrepreneurship (Enterprise, innovation, employment, taxation, education, …)
Respecting diversity among different regions, types of entrepreneurs and their enterprises
European agenda for European agenda for EntrepreneurshipEntrepreneurship
28
Five key areas for action
1. Fuelling entrepreneurial mindsets
2. Encouraging more people to become entrepreneurs
3. Gearing entrepreneurs for growth and competitiveness
4. Improving the flow of finance
5. Creating a more SME-friendly regulatory and administrative framework
The Entrepreneurship Action PlanThe Entrepreneurship Action Plan
European agenda for EntrepreneurshipEuropean agenda for Entrepreneurship
29
Key actions 2004-2005• Fostering entrepreneurial mindsets through school
education• Reducing the stigma of failure• Facilitating transfer of businesses• Improving social security of new small business
owners• Tailor-made support for women and ethnic minorities• Facilitating SMEs business cooperation in the internal
market• Fostering innovative clusters • More equity and stronger balance sheets• Listening to SMEs• Simplification of tax compliance
The Entrepreneurship Action PlanThe Entrepreneurship Action Plan
European agenda for EntrepreneurshipEuropean agenda for Entrepreneurship
30
Possible key actions 2006 and beyond
Conducting entrepreneurship campaigns
Fostering the creation of more fast-growing enterprises (gazelles)
Promoting entrepreneurship in social sectors
Enabling micro-enterprises to recruit by reducing the complexity of regulations
Facilitating SMEs’ access to public markets
The Entrepreneurship Action PlanThe Entrepreneurship Action Plan
31
Innovation and Technology Transfer• Innovation policy
• Gate2Growth : business plan assistance & project-investor matching (www.Gate2Growth.com)
• Networks– Innovation Relay Centers : 68 IRCs to promote
technology transfer – ‘Innovating Regions in Europe’ network
• CORDIS (www.cordis.lu)
Other EU programmes and policies on SMEs with a bearing on BIs
32
Innovation ScoreboardC
urr
ent
per
form
ance
EU
ave
rag
e
Trends over last four years
EU average
+/+High performance,
High trend:“Moving ahead”
+/- High performance,
Low trend:“Losing momentum”
-/- Low performance,
Low trend:“Falling further
behind”
-/+Low performance,
High trend:“Catching up”
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Overall innovation performances
P T
TR
SKSI
RO
P L LV
EECZ
CY
BG
J PUS
NO
IS
CHUK
SE
FI
HU
AT
NL
LUIT
IE
FR
ES LT
EL
DEDK
BE
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
0 5 10 15 20 25 30 35 40 45
Average change in trend indicators (%)
2003
SII-
2
2. Losing momentum 1. Moving ahead
4 Falling further behind 3. Catching up
34
Innovation Scoreboard: M. State 1
113
140
254
104
142
141
223
342
380
102
246
189
160
177
106
161
142
151
0 50 100 150 200 250 300 350 400
S&E grads
Work pop w 3rd educ
Lifelong learning
Emp h-tech manuf
Emp h-tech serv
Public R&D exp
Business R&D exp
EPO h-tech pats
USPTO h-tech pats
SMEs innov in-hse
SMEs innov co-op
Innov exp
Venture cap
New cap stock mark
New-to-mark prods
Home Internet access
ICT exp
VA h-tech manuf
35
Enterprise investment in LLL
EU A B D DK E EL F FIN I IRL L NL P S UK
% e m p l o y e e st a k i n g j o b -r e l a t e d t r a i n i n gc o u r s e s
35.3 32 40 32 53 26 13 37 50 15 41 36 41 18 60 39
T r a i n i n g % o fl a b o u r c o s t s
1.9 1.3 1.6 1.5 3.0 1.5 1.1 2.0 2.4 0.8 2.4 1.9 2.8 1.2 2.8 2.7
% e m p l o y e e sw i t h c o m p u t e rt r a i n i n g
34.1 35.9 55.2 20.1 18.2 26.1 21.4 39.2 40.4 48.3 36.6
36
Biotech Innovation: Performance
37
Innovation performance vs GDP
2000 SII vs. 2002 per capita GDP (EU=100)
ELP
SI
DK
E
A
BF
D
NL
UKFIN
IRL
60
70
80
90
100
110
120
130
-10.0 -8.0 -6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0
SII
Per
capita
GD
P (
EU
=100)
R² = 0.55
38
Innovation Scoreboard: M. State 1
113
140
254
104
142
141
223
342
380
102
246
189
160
177
106
161
142
151
0 50 100 150 200 250 300 350 400
S&E grads
Work pop w 3rd educ
Lifelong learning
Emp h-tech manuf
Emp h-tech serv
Public R&D exp
Business R&D exp
EPO h-tech pats
USPTO h-tech pats
SMEs innov in-hse
SMEs innov co-op
Innov exp
Venture cap
New cap stock mark
New-to-mark prods
Home Internet access
ICT exp
VA h-tech manuf
39
Innovation Scoreboard: M. State 2
55
48
60
98
84
79
42
22
33
101
42
70
81
39
208
89
75
67
0 50 100 150 200 250
S&E grads
Work pop w 3rd educ
Lifelong learning
Emp h-tech manuf
Emp h-tech serv
Public R&D exp
Business R&D exp
EPO h-tech pats
USPTO h-tech pats
SMEs innov in-hse
SMEs innov co-op
Innov exp
Venture cap
New cap stock mark
New-to-mark prods
Home Internet access
ICT exp
VA h-tech manuf
40
Report on Benchmarking of Business Incubators
• Available on:http://europa.eu.int/comm/enterprise/entrepreneurship/support_measures/incubators/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
41
Business Incubator type (I)
Two years ago the following issues were raised at
the Best practices in Science Based incubators
conference
• 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)
42
Business Incubator type (II)
‘New economy’ incubatorsre 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.
43
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
44
Setting Up and Operating Incubators (II)
• Incubators should be promoted by an inclusive partnership of public and private sector stakeholders
45
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
46
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
47
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
48
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
49
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
50
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
51
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
52
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
53
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
54
A European Definition?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.
55
Points for reflection (I)
• Information base about BIs and STPs
• 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
56
Points for reflection (II)
• Benchmark development
• Toolboxes
• Certification/accreditation
• Interaction between local level/knowledge
• Information / Experience
57
BIS as cornerstone instrument for a successful implementation of all relevant, Lisbon objectives
specific, instruments and policies (I)
WHY? - Privileged forum for:
• Incubation of ideas and innovation (not just a ‘coaching’ site)• High quality training (not just provision of office space and
facilities)• Social integration (not just for hi tec ventures)• Promotion of sustained growth (not just for ‘hit and off you go’
approach• Wider networking and partnerships (not just for local approach)• Establish standard schemes with potential sources of finance• Establishing the links between the teaching world and first steps
in working life
58
BIS as cornerstone instrument for a successful implementation of all relevant, Lisbon objectives
specific, instruments and policies (II)
• Debate and info dissemination on sensitive issues such as, e.g. reform measures, career guidance
• Promote the taking of proactive action on major upcoming issues for the EU such as:
– Ageing population– IPR / EU patent– CSR, Environmental & Welfare issues with ways to
tackle the problems posed and disseminate good practice from the outset at shop floor level
• Disseminate good practice
59
Business Incubators Database (I)
1513
25
110
237
81202
87
2422
2421
103
8111
2821
3260
AUSTRIABELGIUM
BULGARIACYPRUS
CZECH REPUBLICDENMARKESTONIAFINLANDFRANCE
GERMANYGREECE
IRELANDISRAELITALY
LATVIALITHUANIA
LUXEMBOURGMALTA
NETHERLANDSPOLAND
PORTUGALROMANIA
RUSSIAN FEDERATIONSLOVAKIA
SPAINSWEDEN
SWITZERLANDUNITED KINGDOM
Incubators by country = 774
60
Business Incubators Database (II)
AUSTRIA 15
BELGIUM 13
BULGARIA 2
CYPRUS 5
CZECH REPUBLIC 1
DENMARK 10
ESTONIA 2
FINLAND 37
FRANCE 81
GERMANY 202
GREECE 8
IRELAND 7
ISRAEL 24
ITALY 22
LATVIA 2
LITHUANIA 4
LUXEMBOURG 2
MALTA 1
NETHERLANDS 10
POLAND 3
PORTUGAL 8
ROMANIA 1
RUSSIAN FEDERATION 1
SLOVAKIA 1
SPAIN 28
SWEDEN 21
SWITZERLAND 3
UNITED KINGDOM 260
All countries 774
Incubators by country = 774
61
Business Incubators Database (III)
SOFTWARE DEVELOPMENT
138COMMUNICATION103
ENGINEERING98
E-BUSINESS129
COMPUTER TECHNOLOGY
123
BIOTECHNOLOGY113
INFORMATION AND COMMUNICATIONS TECHNOLOGY (ICT)
117
MULTIMEDIA104
E-COMMERCE104
ENVIRONMENT108
Incubators by sector – Top 10
62
Business Incubators Database (IV)
Incubators by sector – Top 10
Top Ten Business Sectors represented by CORDIS Business Incubators
SOFTWARE DEVELOPMENT 138
E-BUSINESS 129
COMPUTER TECHNOLOGY 123
INFORMATION AND COMMUNICATIONS TECHNOLOGY (ICT) 117
BIOTECHNOLOGY 113
ENVIRONMENT 108
E-COMMERCE 104
MULTIMEDIA 104
COMMUNICATION 103
ENGINEERING 98