Business incubators- support for business start-ups

1. Business incubators-support for business start-ups Vieta idejām!

2. Speaker • Sanita Laiviņa Valmiera BusinessandInnovationIncubator

3. Great Latvia success story http://www.youtube.com/watch?v=E_KNJYBCK7c

4. Latvia is again among the growth leaders in Europe

5. Facts about Latvia • Capital:Riga • Population:2,181,580 • TotalArea: 24,938 (sqmiles) 64,589 (sqkilometers) • Currency:Latvianlat (LVL)

6. Macroeconomic indicators • GDP (2011): $34,58 billion (USD) • Inflation (May 2012) – 2,2% • Exports are the Latvian economic “driving force”. In 2011, in comparison to 2010, it increased by about 28,1 % Promising business sectors are: • Wood processing • Metalworking and mechanical engineering • Transport and storage • Information technology • Environmental technology • Health care • Life sciences

7. Future? • Knowledge and innovation are the main resources of Latvia’s national development goals

8. Demography • In 2011 65.8% were working-age population,whereas 20.5% older than working age. 13.7% of the inhabitants were younger thanworking age • In Latvia, there are significantly more workingage women than working age men • 67% of the inhabitants of Latvia live in townsand cities, whereas only 33% - in ruralterritories.

9. Labour force • Unemployment rate - 12.1% • Minimum wage - LVL 200 (approximately285 Euros) per month • Latvians have the highest foreign language skills among the EU countries • The most in-demand specialists are IT professionals and sales specialists • Latvia’s labour force is rated in the top five in the world in terms of university students percapital and possesses a northern European culture and work ethics • Latvians generally are hard working, reliable and quick to learn

10. Education • In 2010 about 10 000 people have graduated vocational schools. Consequently, the demandin production and vocational industries will increase during the next years • The number of graduates from universities andcolleges has doubled from 2000 to 2010 • Since 2000, the bulk of university graduates isin social sciences, merchandising and law,which is 14 500 in year 2010

11. Doing business in Latvia

12. Setting up business in Latvia

13. Reasons holding back to set up business in Latvia • Additional stress – 59% • Stable job and income vs risk to have no profit – 59% • Uncertainty about the future, insecurity, high risk - 42% • Less time with family and friends - 38% • Business performance is harder work than paid employees – 25% • Entrepreneurs have to do things that do not want to do (for example, relations with public authorities, paperwork, etc. .) – 12%

14. Reasons encouraging to set up business in Latvia • Access to free funds that can invest in business - 41% • Good business idea - 27% • Tax cuts - 21% • accessible public support programs for entrepreneurs - 16% • confidence about stability in the national economic situation - 13% • associates / business partners' appearance - 13% • 24% of working age population expressed the opinion that nothing could encourage them to start their own businesses

15. Setting up a businessin Latvia

16. What is required in orderto create LTD in Latvia? • Passport • Name of the LTD, which is not registered in the Commercial Register • Foundation agreement • Statutes • Notice of legal address • Application (Form no.: 4) • Statement from the banks of the temporary opening of the account and capital contributions • Document certifying payment of state duty and publication fee

17. State support instruments • Technological centres, technological parks, industrial parks, business parks and businessincubators • Innovation centres, business support centres, consulting and information companies,innovation application centres and regional development agencies • Extensive assistance is also available from the Investment and Development Agency ofLatvia (LIAA) • In addition, special government funding programmes are available to assist export-orientedbusiness activities

18. What is a business incubator?

19. Incubators as a policy tool: • Assist small firms during start-up period • Serve as a network integrating: -high tech industries -universities -public organizations -other related actors • Assist SMEs in the use of their resources in more efficient ways

20. BI locations in Latvia

21. Scientists with a new technology Students Home-based business owner ready to expand Serial entrepreneurs launching a new start-up company Interest groups .... An incubator client might be...

22. Business incubator is: • A facility and services to help start-up and young companies; • Support process that accelerates the successful development of these companies; • Provide an array of targeted resources and services; • Help these companies survive and grow during their start-up period; • Helps create new jobs and keep businesses in community; • Find people with marketable ideas and turn those ideas into companies;

23. Business incubator is: • Provide expertise in developing business and marketing plans; • Coach and guide them so they can focus on developing and growing their business; • Makethemfinanciallysuccessfulandfreestanding; • Providenetworkingwithfellowentrepreneurs.

24. Enterprise life cycle

25. What Incubators Offer Help with business basics Networking activities Shared equipment & services Marketing assistance Help with financing

26. Business incubator support services Infrastructureservices: -Premises rent and management -Legal address -Internet and telecommunications services -Secretary services Basicservices: -Accounting services -Legal services -Recruiting services -Business plan preparation and evaluation services -Sales and marketing consulting services -Attraction of additional funding and different support instruments -Cooperation at local and international level Specializedservices: -Technology consulting services -Market research services -Patenting services -Use of laboratory equipment -Testing and certification services -International marketing and export promotion consulting services -Quality management systems implementation services -Product market positioning and design consulting services -Integrated marketing consulting services -Specific legal services

27. Support intensity • Joining business incubator means definate support intensity will be granted to the new incubatee. In other words a specific discount to all services and consultations received during incubation period: • 1st year from 55% to 85% • 2nd year from 35% to 60% • 3rd year from 15% to 40% • 4th year up to 10% • Support intensity amount and changes are dependant on company age, operation duration in the incubator, as well as results from operations – the more active and successful company is, the higher support intensity will be granted.

28. Support intensity Higher support intensity will be granted to companies that fulfill the following criteria: • The company is younger and it operates in the incubator for a shorter time • The growth potential of the business has been rated higher • The company generates better business results (amount of new work places created, turnover growth, tax amount) • The company operates in one or more prior fields • Annual turnover growth is 50% comparing to previous year • Company has created and launched at least one new product that has to be patented • Export turnover reaches 40% of total turnover

29. The selection criteria Businessincubatprcannotsupport: • Manufacturingagriculturalproducts • Fisheries and aquaculture • Coal industry • Shipbuilding • Financialintermediation • Trade • Commercialservices • Transport • Manufacturingalcoholicbeverages • Manufacturing tobaccoproducts • Gambling

30. How to become a tenant Submisson of application Commission’s decision on qualifying for pre-incubation Commission’s decision on qualifying for incubation Conclusion of acontract Up to 4 years

31. Uzņēmumam vēl nav 2 gadi Atbilst sīkā vai mazā komersanta statusam Inkubatorā var atrasties 4 gadus Uzņēmums darbojas atbalstāmajās nozarēs Ir gatavs pastāvīgi attīstīties, uzrādot pieaugošus rezultatīvos rādītājus The selection criteria

32. Prior fields • Company cooperates with Vidzeme University of applied sciences on (comercial-)realization of research results • Company offers solutions to the region’s industry on technology modernization and export growth • Promote implementation of electonic and IT technologies in educational, medical and social protection areas in region • Company offers environmentally friendly manufacturing solutions • Promote growth of creative industries • Offers new and innovative solutions to the region's tourism development • Business carried in IT, telecommunications and manufacturing industries

33. Best practise examples • WendiToys, Ltd. • Services received: • Web page – 1505,50 LVL • Marketing and export consulting – 10 230 LVL • Testing and sertification of products – 15 110,50 LVL • TOTAL: 26 846 LVL (38 351,43 EUR) • Financed by BI: 21 476,80 LVL (30 681,14 EUR) • Co-financed by company: 5369,20 LVL (7670,29 EUR)

34. “80ART” Low budget audio ads Competitive advanatges: time, price, individual approach

35. “Mearra Latvia” • Ltd. "Mearra Latvia" is developing web projects that are based on open source software Drupal

36. “MUUV” • Ltd. «MUUV" is developing web management systems that are based on open source software Joomla

37. Valmiera Business and Innovation Incubator • VBII operates since 2007 • Located in Valmiera • Mixed portfolio business incubator • VBII operates in north-east of Latvia (Valmiera, Gulbene & Valka districts) • In August 2009 VBII signed an agreement of 2,25 million euros in order to operate for the next five years • VBII will incubate at least 103 companies creating at least 206 new working places in the region

38. Valmiera Business and Innovation Incubator • Premises of 2770m2 for offices and manufacturing

39. Valmiera Business and Innovation Incubator

40. Valmiera Business and Innovation Incubator

41. Valmiera Business and Innovation Incubator

42. CBR Home Market project • The Home Market project aims at enlarging the market where SMEs operate from the local level to the level of the entire Central Baltic region, to unite the region so that it is viewed as one single market area • Developingthe guidelines for a regional cross-border incubation system and implementing the pilot projects amongst participating business incubator companies

43. Business culture in Latvia

44. Where to find information? • www.liaa.gov.lv • www.em.gov.lv • www.csb.gov.lv

45. VBII marketingprojectmanager Sanita Laiviņa E-mail: sanita.laivina@vbii.lv Phone: 26357065, 64250880 Contacts for further information WEB: www.vbii.lv Skype: v.b.i.i. Twitter: VBII_inkubators