Introduction to: Managing the Incubator

1. Introduction to:Managing the Incubator Three generations of Incubation By Pim de Bokx (c) Pim de Bokx

2. Introduction • Entrepreneur since my 20th (officially) • Several companies and organisations founded • Education in Landscape architecture and Business Science • Started BViT innovation network in 2000 with 2 partners and 1 VC • Workgroup HRD Gate2Growth Incubator Forum • Chairman DIA (Dutch Incubation Association) • HuygensXC, expertise centre incubation entrepreneurship • Etc. (c) Pim de Bokx

3. Definition of incubator & incubation • An incubator is an organisation that boosts a (incubation-)process to support the accelerated growth (incubating) of ventures (=incubatees) into successful enterprises with a bundle of services, such as physical space, common services, culture, training, coaching (knowledge & experience), networking connections and (access to) capital. (c) Pim de Bokx

4. 3 generations of incubators • First Generation: flexible workspace and common services • Second Generation: FG+ Enterprise incubation process • Third Generation: SG+ Technology-Market focus & commitment, exit policy (c) Pim de Bokx

5. First Generation Product: flexible workspace and common services Clients: small companies, foot-print companies, subsidiaries Industry: Real Estate Exploitation Maturity: mature (U.S./West-EU) Valuecreation: Real Estate value (c) Pim de Bokx

6. Second Generation Product: flexible workspace, common services, incubation services (coaching, business advice, networking, access to capital) Clients: start-up companies, spin-offs Industry: Regional/Local economic development Maturity: becoming mature (U.S./West-EU) Valuecreation: Real Estate value, ‘Community value’ (c) Pim de Bokx

7. Third Generation Product: 2d generation + focus on and access to market/clients, cooperation in Technology-Market-clusters/networks, ‘Commitment of Management’ and an entrepreneurial management style Clients: start-up companies, spin-offs Market: Knowledge Institutes, Corporate enterprises, Venture Funds Industry: (New) Enterprise Development Maturity: immature Valuecreation: RE, ‘Community value’, Enterprise Value (c) Pim de Bokx

8. Future Generation? When really a mature Incubation Industry? • Return on investment 10% and up? • Industry and Knowledge Institutes equally involved as contractors? • Incubator is an enterprise? • Incubation Management is Systematic? • A (self-)sustainable industry? (c) Pim de Bokx

9. pmc pmc pmc knowledge application exploitation pmc pmc pmc Incubation & Innovation • Attract and develop portfolio of complementary businesses Market Thematic Clusterincubator Knowledge Source (c) Pim de Bokx

10. Training business planning Coaching by entrepreneurs Experts on Product, Market & Finance Acces to innovation network Temporary work place Clustering Coaching by entrepreneurs Experts on Product, Market & Finance Full-service work place in Kraamkamer Management support Finance Clustering Coaching by entrepreneurs Experts on Product, Market & Finance Full/ half service office units Management support Personnell Clients Co-operate in network Experts for Market & Organisation, Finance Personell Innovation experts Merger & Growth Internationalisation Pre-start Product Marketing Growth exit exit exit exit The incubation process The intake is focussed on finding the best possible match between entrepreneurs demand and the incubator’s focus and resources intake (c) Pim de Bokx

11. Value creation on several levels • Personal development • Product development • Market/Business development • Organisation development • Enterprise development • Network development • Economic development (c) Pim de Bokx

12. Summary • From Real Estate Value to Community Value (employability) to Enterprise Value • A Third generation incubator creates value on all three levels • First and second generation is mature & self sustainable • Third generation incubator needs an innovation system (c) Pim de Bokx

13. Generations & Types First Generation 1980> Second Generation 1990> Third Generation 2000> (c) Pim de Bokx

14. Incubators & regional development Luxury or Necessity? (c) Pim de Bokx

15. (c) Pim de Bokx

16. Case: TBSG (Sweden) actions • A Swedish regional stakeholder,TBSG, in charge of 12 incubators related to 6 universities/technical institutes, years 1993-2003 • Contributed with 10 M Euros to this innovation system through loans, riskcapital, other contributions (c) Pim de Bokx

17. Effects of TBSG actions • 147 active incorporated firms identified, out of which 105 possess yearly income and balance sheet statements • 451 are employed by these firms • The firms have sales from 0.1 M Euro to 10 M Euro (c) Pim de Bokx

18. Effects of TBSG actions cont. • The firms have attracted 100 M Euro in equity financing, out of which 1.5 M from Business Angels 7 M Euro in public contributions and loans Thus 107 M Euro in external capital (c) Pim de Bokx

19. Total input to the (regional) Innovation system • TBSG: 10 M Euro • External capital: 107 M Euro • Total: 117 M Euro input (c) Pim de Bokx

20. Output from the Innovation system • The 105 firms have the last (OBS one year) year payed: 6 M Euro in social charges 7 M Euro in so called employment tax (profits only minor) Total 13 M Euro in output (c) Pim de Bokx

21. Evaluation • Total input: 117 M Euro • Total governement input: 17 M Euro • Yearly return to governement: 13 M Euro • Return: Positive ! (c) Pim de Bokx

22. Other case • It costs 11.000 Euro (CSES) to create a new job through an incubator. • This is a low figure compared to normal training costs and investments made to handle unemployment in the society, an unemployed person is an average 200% more expensive. (c) Pim de Bokx

23. Conclusions • Incubators are profitable investment! (c) Pim de Bokx

24. (c) Pim de Bokx