Title: Willie O' Siyanbola, B'Sc Ife, M'Sc, Ph'D Sussex, FMSN Director GeneralChief Executive, National Cen
1Willie O. Siyanbola, B.Sc (Ife), M.Sc, Ph.D
(Sussex), FMSNDirector General/Chief Executive,
National Centre for Technology Management
(NACETEM), Obafemi Awolowo University, Ile-Ife,
Nigeria
TECHNOLOGY INCUBATIONDoes it Work, Can it work?
- Presented at
- A Program Organised by the,
- Federal Polytechnics Nekede,
- Owerri, Imo State
2ACKNOWLEDGEMENT
- The Rector, ENGR. O. I. NWANKWO, fnse
- Director, RD Dr. F.A. Onukogu,
- Other Principal Officers
3Outline of Talk
- Acknowledgement
- Concept of TBICs (Definitions, Types,
Classification, Characteristics and Benefits) - Does it work? Success stories of selected
countries - Can it work? Scorecard of Technology Business
Incubation in Nigeria - Is Otigba ICT Village Experience Any Lessons?
- Concluding Remarks
4RD Commercialization
- Is also Known as Technology Commercialization
- Refers to the process of translating Research
Results from Drawing Board to Marketplace - Requires Entrepreneurial Skills distinct from
Academic Skills - Uses Technology Transfer Concept to Bring
Intellectual Properties Developed at the
Knowledge Centres to the Marketplace thereby
Bridging the Gap Between Inventions and
Innovations (Academics Industry)
5Technology Incubation
- A new form of social institution which provides
services and nurtures high-tech firms during
their start-up and early growth phases. They are
technology-oriented variants of business
incubators. - Designed to create a favourable entrepreneurial
environment and facilitate technology transfer - Catalyse the firm's early growth and enhance the
success rate of enterprises. - Known by various names and definitions in
different countries e.g.Innovation Centres,
Science Parks and Science and Technology Centres. - There is no single model or definition of a TBI
because the concept differs from one country to
the other.
6Origin and Evolution
- Incubators Nurture Young Firms, Helping Them to
Survive and Grow during the Startup Period when
they are Most Vulnerable. - The concept of incubators was first initiated in
the United States in the 1950s - Today, Technology Incubators had become an
instrument for promoting a more diversified
industrial base for a regional economy and
stimulating local job creation and wealth
generation. - The incubation process involves a number of
stakeholders and operates in terms of a simple
input-output model
7The Incubation Process
- Inputs
- These mainly consist of the inputs made by
stakeholders (e.g. providing finance), management
resources, and projects put forward by
entrepreneurs - Processes
- The various inputs are brought together in the
business incubation process through the provision
of incubator space and other services to
companies - Outputs
- Successful companies graduate with positive job
and wealth creation impacts on local economies.
8Incubation Process
Government
Community Centres
Business Sponsors
INCUBATOR PROGRAMME
Flexible Lease Space Shared Business
Services Business Advice/Mentoring Business
Networking Education and Training Intellectual
Property Support Access to Equity and Debt
Capital
Incubator Management
Entrepreneurs
Graduate Businesses
Community Impact
Economic Impact
9COMMON OBJECTIVES FOR TBICs
- Economic Development
- stimulating job creation and industrial
restructuring - Technology Commercialization
- commercialization of RD results and linkage of
industry with research institutes and
universities - Property Venture/ Real Estate Development
- Entrepreneurship
10Classification of Incubators
- Incubators can be classified by
- sponsors/ stakeholders of the incubators
- objective and characteristics of tenant firms
- space and level of manufacturing activity in the
incubators and - a mixture thereof.
11Classification of Incubators
- By objectives and characteristics
- sponsors/ stakeholders of the incubators
- objective and characteristics of tenant firms
- space and level of manufacturing activity in the
incubators and - a mixture thereof.
- By a mixture of indices
- Technology Incubators
- Technology Innovation Centres
- Technology Business Incubators
12BASIC SERVICES PROVIDED BY TBICs
- Physical Infrastructure (shared office,
production space, laboratory and testing
facilities) - Management Support (expert advice on business
know-how, technology assessment, market studies
and marketing, recruitment of qualified staff ) - Technical Support (links to technology and
manufacturing extension services, libraries and
data bases, consultancy) - Access to Finance (organize access to venture
capital, loan guaranteeing for tenants, share of
equity in tenant firms) - Legal Services (legal assistance in company
incorporation, drafting of licensing agreement,
patents etc.) - Networking (connecting tenants with other firms
with similar technology focus and other
specialist on relevant data bases)
13DISTINCT CHARACTERISTICS OF TBIs
Generally linked to knowledge centres e.g.
universities, polytechnics, research institutes.
LINKS
Established within a technology park or close to
other sources of technological support
LOCATION
Management mentoring staff require specific
expertise in development of technology-led
businesses
STAFF
May require specific equipment (computing,
testing, rapid prototyping, etc.) and other
technical expertise
SERVICES
14BENEFITS
- For RD community
- research commercialisation
- interaction with industry
- additional income
TBI
- For tenant companies
- access to resources
- reduced risk time to market
- improved business skills
- For corporate sector
- technology acquisition
- investment choice
- social responsibilities
15BUSINESS INCUBATORS AROUND THE WORLD IN SELECTED
REGIONS (2001)
16INCUBATION PRACTICES AROUND THE WORLD
- Incubators have been widely utilised in several
countries of the world as an economic
development tool. - According to a recent 2001 estimate, there are
over 4000 incubators world-wide.
17TBI PROGRAMMES IN OTHER COUNTRIES
- Singapore
- Malaysia
- Philippines
- Egypt
- South Africa
- China
- Israel
- Germany
- United States
- Japan
- United Kingdom
- Republic of Korea
- Uzbekistan
18GENERAL CHARACTERISTICS
- Tenant firms of Technology Incubators are
start-ups or spin-off firms, which are
established specifically to Exploit Technologies
that are developed most often in the nearby
Tertiary Institutions, Research Institutes or
Private Laboratories - The proximity of the incubators to the knowledge
sources enables the firms to have adequate
interactions required to sustain the exploitation
of the emerging technologies.
19GENERAL CHARACTERISTICS (contd)
- The effectiveness of the incubation process could
be measured by the rate of graduation of the
tenant firms. - The performance of the graduated firms needs
monitoring to enable the incubators follow their
progress in the business world. - Thus, coordination, monitoring and impact
evaluation of technology incubator outputs are
essential.
20Some Interesting Statistics
- Reports indicate that about 47 per cent of
incubated firms survive after four years and only
38 per cent survive after six years in the United
States of America (USA) . - In France, only 8 to 20 per cent of incubator
firms fail after two years as compared to 31 per
cent of new firms in general, - While about 50 of graduate firms in Australia
were still in business eight years after
graduation compared to only 5 per cent of
non-incubator firms
21Some Interesting StatisticsSpecific Countries
Examples
22TBIs IN UZEKISTANObjectives
- Development of SME business by creation of
favorable economic conditions for setting up and
growth on new enterprises and business projects,
in particular innovative ones - National TBI programme operational since 1994
- 23 TBIs established
- RD Background
- 14 general ST programmes new technologies,
materials, etc. - 18 sectoral ST programmes IT, environment,
agriculture, etc. - 11 basic research programmes physics, chemistry,
biology, etc.
23TBIs IN UZBEKISTANResults/Impacts
- 400 business projects prepared
- 100 graduates
- 245 tenants
- More than 100 companies received risk capital
- 2800 jobs created
- 12000 people trained
24ISRAELS TECHNOLOGY INCUBATOR PROGRAMMEObjective
s
- Nationwide technology incubator programme was
launched in 1991 to utilize the ST potential of
immigrants from the Soviet Union. There are 26
technology incubators in Israel today. - Technology incubator support fledgling
entrepreneurs and opportunity to develop their
innovative technological ideas and set up new
businesses in order to commercialize them.
Incubator Tenants
immigrants
25ISRAELS TECHNOLOGY INCUBATOR PROGRAMME Results
- More than 250 technological projects are being
carried out in the incubators - By the end of 2006, over 1000 projects had
matured and left the incubators - 51 of the graduates are still in business and
have 1,400 employees - Total private investment obtained by the tenant
companies is more than 1.5 Billion Dollars - Technology incubators have become massive
repositories of potential ideas for new high-tech
ventures in the future
26Total Cumulative Private and Government
Investment In Graduate Incubator Companies in
Israel by 2006
27TBIs IN CHINA
- Philosophy
- First TBI formed in 1987
- Modeled after best practices used in developed
countries - Adapted to specifically suit Chinas unique
business conditions - Objectives
- To offer hi-tech stat-ups with optimal incubation
services - To offer an environment for market exploration
and international cooperation - Training founders of companies to become mature
entrepreneurs - Form part of major measures to help develop
Chinas hi-tech industry
28TBIs IN CHINA Results
- As at 2001 China has
- More than 400 various types of TBIs
- Comprising -
- 280 Innovation Centres
- 48 University-related Science Parks
- 44 Pioneer Parks for Returned Overseas Scholars
- 22 Science Parks
29China TBIs Result 2001 and 2006
30China TBIs Development Trend 2008 3 Billion
incubation fund
- Plans to Encourage the Entrepreneurship to Bring
out the unprecedented tide of technology
innovation - Perfect technology incubation system
comparatively - Become the new beginning, hot spot, brilliant
spot for the implementation of Indigenous
Innovation and the development of local economy
31TBIs IN CHINA Impacts
- Export earnings rose to US 1.5 Billion
- More Incubation expertise already being exported
(at the invitation of UNDP, UNESCAP and UNESCO) - Over 200 incubator managers trained
- Good infrastructure (real estate, information
network and venture capital) - 4- step incubation process developed
- Abundant lessons and resources to draw on during
Chinas reform of ST and economic development
campaign
PROJECT ENTERPRISE LARGER CORPORATION
MULTINATIONAL
32TECHNOLOGY BUSINESS INCUBATOR IN NIGERIA
- Concept was introduced to the Nigerian Government
by UNDP UNFSTD in 1988 - Consortium of 3 firms was commissioned to advise
on the desirability and implementation modality
(those 3 firms are NISER, OAU and a private
consulting outfit) - First TBI in Nigeria was established in Agege in
1993, followed by Kano and Aba in 1994 and
1996 respectively. The 3 centres are industrial
nerve centres in the regions where they are
located - These centres were established by the Federal
Government to be managed by the FMST. Since then,
17 additional centres have been established
across the country (see map)
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34MAIN OBJECTIVES
- To boost the industrial base of the country
through commercialisation of RD results, upgrade
and enhance the application of indigenous
technologies - To nurture the start-up and growth of new
innovative business engaged in value-added and
low, medium and high-technology related
activities over a period of time - To promote functional linkage between
Research/Industry - The Programme was established by Decree No 5 of
1995 and has been under the supervision of FMST,
through NBTI.
35ENVISAGED BENEFITS OF TBICs IN NIGERIA
- The expected benefits of TBICs to the Nigerian
Economy are listed as follows - Promotion of Indigenous Industrial Development
- Innovation and Commercialization of RD Results
from Research Institutes and Knowledge Centres - Economic Diversification Through the Development
of SMES - In Manufacturing and Services
- Linkage of SMEs with Big Businesses by Acting as
Local Suppliers thus Reducing Dependence on
Imports - Job Creation by New SMEs to Reduce Unemployment
36CHARACTERISTICS OF NIGERIAN INCUBATORS
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38SOME ACHIEVEMENTS OF THE INCUBATORS
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40OBSERVATIONS ON THE INCUBATORS IN NIGERIA
- Although there are 17 TBIs, many of them are yet
to become functional even after about 15 years - Tenants get engaged in buying and selling while
many are businesses that had nothing to do with
research findings, technology value addition
and commercialization of technology - Originally conceived as a tripartite arrangement
between the Federal Government, host State and
the entrepreneurs each with distinct functions
and roles - Admission criteria were set but never strictly
adhered to.
41OBSERVATIONS ON THE INCUBATORS IN NIGERIA (contd)
- Activities take place in all fields of RD
without focusing on any area of specialisation - On mangement
- None of the existing centres had an Advisory
Board or Council that directly supervises its
operations - Seed capital to tenants on admission virtually
suspended for lack of funds and unwillingness of
tenants to repay the loans - Most of the TBIs are located near/inside
industrial layouts (wiyhout adequate facilities)
without adequate linkages to a university or
Research Institutes - Level of support services are generally poor
42STRATEGIES FOR IMPROVED PERFORMANCE
- The sponsors should be focused as to what
functions the incubators should serve business
development, technology development,
manufacturing, etc. - Develop selection process for the tenants.
- Fix appropriate tenant entry and exit criteria
- Conduct feasibility study find the local needs
and choose the best suited location. - Ensure Adequate Funding Running of the
Incubator and Venture Capital. - Use stringent criteria to select the management
team the ability of the staff in pushing
inventions into innovation is very important. - Ensure adequate provision of the services
production space, secretariat services,
management consultancy, etc. - Plan for regular evaluation of the activities of
the incubator benchmark against standard
organisations.
43IS OTIGBA ICT VILLAGE A CLUSTER-BASED TBI?
44IS OTIGBA ICT VILLAGE A CLUSTER-BASED TBI?
- Origin/Evolution
- Started around 10 years ago on a low key.
- Developed from a 10-shop computer market to over
2000-shop village in the span of 12 years. - Activities have grown from ordinary sales of
computers/accessories to cloning branding of
computers and mobile phones - Now diversified as far as providing non-technical
ICT-driven services. - Daily sales run into millions of naira
- Partnerships in sales/purchase with foreign firms
already exist - SMEDAN now has Business Development Offices been
sited
45IS OTIGBA ICT VILLAGE A CLUSTER-BASED TBI?
- IMPACTS
- Employment Generation
- Wealth Creation
- High rate of knowledge and skills acquisition
- Attraction of attention to Nigerias ICT sector
(Intel top officials visited the village in 2004)
46IS OTIGBA ICT VILLAGE A CLUSTER-BASED TBI?
- PROBLEMS
- Choked Location
- Poor access to funds/ venture capital
- Little or no commitment from government
- Linkages to knowledge Centres not formalised
and strengthened
47What should the mgt. of Fed. Poly. Nekede do?
- Leverage on existing competencies amongst rank
and file. - Think Global but act local
48RECOMMENDATIONS
- Following examples of good practices in
Technology Incubation. - Maintain Strong Link to NACETEM for Capacity
Building and Knowledge Support. - Work with the National Board for Technology
Incubation (NBTI) to attract Venture Capital
Funds (that could be directly provided to
tenants on a revolving basis)
49RECOMMENDATIONS
- Emulate these good practices
- Clearly defined Objectives and Mission
- Strong Advocacy for Government Commitment
- Recruitment of Entrepreneurial Managers
- Selection of Tenants according to needs and fits
- Tailoring and Leveraging existing services
- Building on local and international linkages
- Diversification of sources of finance
- Sharing of experience through networking
- Performance Evaluation Mechanisms
50- THANK YOU FOR YOUR ATTENTION