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A REVIEW OF THE CURRENT PROVISION OF BUSINESS INCUBATION IN THE WEST MIDLANDS May 2008 A study to inform the AWM Enterprise Board Arnaud Drapier Toni Wanklin. Objectives: Mapping survey, including services provided, sector specialisation and type of client businesses
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A REVIEW OF THE CURRENT PROVISION OF BUSINESS INCUBATION IN THE WEST MIDLANDSMay 2008A study to inform the AWM Enterprise BoardArnaud DrapierToni Wanklin
Objectives: Mapping survey, including services provided, sector specialisation and type of client businesses Individual reviews of business incubation against National Framework/criteria Analysis of the key opportunities within the region in order to maximise the added value of business incubation Methodology: Review of previous research Design and submission of a Self Complete Questionnaire Face to face interviews with key stakeholders and reviews of practitioners Analysis of primary and secondary findings, and writing up of final report Review of Current Business Incubation Objectives and Methodology
“Incubation is a unique and highly flexible combination of business development processes, infrastructure and people, designed to nurture and grow new and small businesses by supporting them through the early stages of development and change.“(UKBI.2007) Business incubation supports: Start-up and early stage of new business ventures by providing them with a supportive/learning environment with access to a range of networks, intensive resources and physical and/or virtual facilities. Pre-start-ups and individuals with tailored support and services to test the market, develop their products and devise a business plan . Established businesses seeking to grow and/or develop new products and services. Review of Current Business Incubation Definition
18 existing business incubation environments (and 12 projects currently under development). This figure is slightly below the UK average - between 20 and 30 business incubation environments per region. West Midlands have a smaller number of business incubation environments per head of population and per number of businesses than neighbouring regions (Wales and East Midlands). Review of Current Business Incubation: Regional Landscape
Presence in the region: Mainly located in Birmingham, Coventry and Warwickshire (urban and economic nodes) but also Staffordshire. Science parks and technology parks are well represented and include pioneers such as Aston Science Park and UWSP. Initiatives such as Staffordshire and Black Country BIC (Hub and spokes model) exist in order to reduce disparity between rural and urban areas. Review of Current Business Incubation Regional Landscape
Client base: Mainly ‘mixed use’ but generally focused on knowledge based businesses with growth potential. All business incubation environments provide physical space and a number of them have developed hot-desking and/or virtual business incubation. Little is done (in the field of business incubation) that targets under represented communities. Review of Current Business Incubation: Regional Landscape
Foundation Phase Nature and types of change in client companies & Business Incubation Environment Contextual Factors Core Principles Selection Policy Strategies Skilled Team Grow on policy & links Policy Control & Management THE BUSINESS INCUBATION ENVIRONMENT Core Elements Infrastructure Process Operations People Socio-economic Impact Long term Adding Value Direct impact Indirect Impact Leading Edge Phase Developing Phase Environmental influences Review of Current Business Incubation Incubation Reviews
Business Incubation Strategy and Delivery Well embedded in sub-regional strategies. In most cases, business incubation activities are completing or widening the strategic objectives of the organisations the belong to. Long established business incubation environments are at the origin of the formation and development of regional industry clusters. Good quality accommodation and access to facilities and business development resources tailored to the needs of clients are being provided. The access to virtual and/or pre-business incubation services that a number of environments provide is particularly valuable to outreach clients. Review of Current Business IncubationIncubation Reviews
Selection and exit policies All business incubation environments reviewed operate a selection policy. In a number of cases and perhaps due to financial and targets pressure (occupancy rates), exit policies, however, do not exist or are not applied in practice. Risk: creation of a bottleneck in the development of innovative businesses. Review of Current Business Incubation Incubation Reviews
Management Team All incubation management teams saw client’s growth as their first priority. In many cases, the core business incubation team was limited compared with the size of the organisations and of objectives. This, normally, has consequences on three cornerstones of business incubation: mentoring, networking, sense of community. Review of Current Business incubation Incubation Reviews
Business support environment has moved on Involvement of business incubation with upstream and downstream business support needs to be strengthened in order to avoid duplication of work. Appropriate funding is needed To offer a range of services broad enough to be of use to all of their clients, as well as specialist services to meet individual needs; To meet best practice. Sustainability: Property VS Process All business incubators consulted during the course of this study required support (capital and revenue); Private sector involvement tends to be limited; All face a certain amount of tension between their core objectives and their need to break even. Review of Current Business Incubation Key Issues
Sustainability: Property VS Process All business incubators consulted during the course of this study required support (capital and revenue); Private sector involvement tends to be limited; All face a certain amount of tension between their core objectives and their need to break even. Socio economic Impact (long term added value) Incubation has a significant impact on business growth and productivity, but this is not currently well recognised; The success of business incubation cannot be measured only by occupancy rates and rental income; Common concern exists that criteria currently in use may need to change in order to assess funding for business incubation. Review of Current Business Incubation Key Issues
Widen the client base/ diversification of market More could be done for under represented communities and disadvantaged areas in tackling the regional and sub-regional productivity gap. Pre start-ups and virtual business incubation These services can be used as a basis for developing Innovation hubs/ access points for entrepreneurs; Also, they can act as an additional pipeline for business incubation. Review of Current Business Incubation Key Issues
. Business clusters Business incubation can act as nodes or centres for existing networks and support activities. Where business incubation is developed on the basis of a specific sector, consideration needs to be given to the long-term sustainability of dealflow. Seed funding Linking the business incubation community to investors and business angels to support the early stage growth finance: a joint seed funding initiative would be useful. Review of Current Business Incubation Key Issues
Thank you! www.ukbi.co.uk Review of Current Business Incubation
