Innovation, Incubator

and Incubation
 Presented By:

Ekta Upadhyay P08

Swati Khandelwal P36
Ravi Ramparia P41
Richa Dhaundiyal P48
Dipti Joglekar P54
Pralhad Walve P56
 Incubator: Commercializing an
Innovation

Entrepreneurship and enterprise development

 Innovation

 Innovation relates to not only doing new

things but also doing things in a new manner
 Thus, it means a new product, a new process,
a break-through or continuous improvement
in managerial practices
 It could be in the field of technology,
marketing, a business idea or a business plan
 Ideas must qualify following parameters for
transition into a successful commercial venture:
– It should be helpful to people
– Time-saving
– Convenient
– Cost-effective
– Improve quality of life
 Comparing Stats on Firm
Survival:
 NBIA estimates that approximately 80 percent
of incubated firms survive their first three
years, compared with a 35 to 40 percent
survival rate for non-incubated start-ups.
INCUBATION
 Definition
“ An organization designed to accelerate the
growth and success of entrepreneurial companies
through an array of business support resources
and services”
 It is a facility that provides:
physical space
capital
coaching
Business services
networking connections
 History
 Concept of business incubation began in the USA in 1959 when
Joseph Mancuso opened the Batavia Industrial Center in a
Batavia, New York, warehouse.

 Incubation expanded in the U.S.

in the 1980s and spread to the
UK and Europe through various
related forms.

 Incubation activity has not been

limited to developed countries.
 Need for Incubation facility
This “hand-holding process” is in relation to:
 Specific conditions and requirements of the
enterprise
 Modern Business environment becoming more
complex
 High degree of uncertainty with regard to success
 High rejection rate for funding by commercial
banks
 Role of Incubator:
 To float successful firm that is financially viable and
freestanding
 To provide Knowledge network and social network
 To provide linkages between societal resources
 Testing of Ideas
 Share risk, funnel expertise, furnish research,
operational plan and provide credibility to an effort
 Providing inputs on managing resources
 Participants
Sponsor Desired goals
Technical university Innovation,
student involvement
Research institute Research commercialization
Public/private partnership Investment, employment,
other social goals
State sponsorship Regional development,
poverty alleviation
Private sector initiative Profit, equity in client, image
Venture capital-based Winning enterprises,
high portfolio returns.
 Types of business Incubator
• Private Sector Incubator
• Corporate Incubator
• Non business Organization Incubators
– Academic and Scientific Incubators
– Local Economic Development Incubators
• Public Private Incubators
• Virtual Incubators
 Private Sector Incubator
Objective
• Profits by selling stocks from a portfolio of companies
allowing risks to be spread
• Co-operation between companies within the portfolio
Targets
• Technological startups generally ICT related
Services Offered
• Management and strategy advice, Legal Services
• Supply of one or several types of finance and search for
complementary financing, Administrative assistance
• · Personal networks, Public Relations, Recruiting
Contd…
Key Problems
• Quality of projects, sourcing Level and conditions of the
incubator payment in comparison with provided
services.
• Valuation of the incubator’s participation at entry and at
liquidation
• Durability of the incubator
Trends
• High levels of consolidation and restructuring of the
sector
• Still looking for a successful model
 Example
• Indiaco, India – Private For Profit Incubator
– Invested in 37 tenant companies
– Office at Chile, US, Australia, India
– Helped tenant companies raise over Rs.35 crores
in private equity
– Generated over Rs.200 crores in
market capitalization
 Corporate Incubator
Objectives
• Develop entrepreneurial spirit among employees – keep talents
• Monitoring – access to new technologies and to new markets
and to make profits
Targets
• Internal and external projects, generally related to the activity
of the company
Services offered
• Financial resources
• Prototype and market testing
• Access to commercial markets and long-term strategic
partnership
Key problems
• Strategic position of the incubator for the corporate
structure
• Management independence and ability to mobilize
internal resources
• Conflicts about the objectives between the owners /
the managers of startup or the company
Trends
• Testing the concept in numerous companies
• likely to develop
 Infosys’s – InfYi to promote
Entrepreneurial dreams
• This initiative encourages innovation among
Infoscions
• Based on the inputs that a project or idea
needs, a senior council member will
contribute to it.
• So far, InfYi has received 13 project ideas.
Three of these will be shortlisted taken from
concept to execution.
 Academic and Scientific
Objectives
Incubators
• Commercialization of technologies
• Development of entrepreneurial spirit
• Civic responsibility and image
• New sources of finance
Targets
• Projects internal to institution and prior to company
creation
• External projects
Services offered
• Concept testing and technical advice and
support
• Intellectual property advice and basic
management advice
Key Problems
• Legitimacy inside the institution
• Legal status, governance, independence and
operational flexibility
• Income sources
• Management quality
• Access to external resources and networks
Trends
• Rapid development under the aegis of public
programs
 Example
• IIM A
– “The number of students starting up their own
venture is increasing in every batch. In a batch of
250 students, at least 10-15 are starting their own
ventures”, Mr. Samir K. Barua, Director, IIM-A
– Currently, IIM-A provides its incubators with a
seed capital of Rs 2,00,000 from its own corpus.
– The institute has three incubator labs.
 Local Economic
Development Incubators
Objectives
• Job creation
• Reindustrialization revitalization
• Economic development
• Support to particular target groups or industries
• Development of SMEs and clusters
Targets
• Small commercial craft or service companies.
• In some cases, high-tech companies
 Services Offered
• Hosting and shared services, Administrative assistance,
Consulting & Access to finance
Key problems
• Durability –lack of resources stability
• Quality of management and provided-services
-dependent on the quality of the manager
• Governance, risk of conflicts about the objectives,
bureaucratic red tape, time spent in negotiating with
the different partners
Trends
• Regular development
• Increasing territorial coverage
 Example
• National Science and Technology
Entrepreneurship Development Board
– established in 1982 under the aegis of Department
of Science & Technology.
– An institutional mechanism to help promote
knowledge driven and technology intensive
enterprises
– Jobs generated 6300
– Technology Incubator Units set up 85
– Currently operating 42 projects
 Public Private Incubators
• These are joint efforts between government
and non-profit agencies. This type of
incubation offers the advantage that
government funding can often be secured to
support private sector expertise and financing.
The Power Of Ideas: Initiative by
ET
 Goal
to encourage anyone and everyone with an idea
to realize his entrepreneurial dream.
 Process
a Business Summary of their idea
 Partners
unique three-way public-private-academic partnership
o Department of Science and Technology (Govt of India) and
o The Indian Institute of Ahmedabad’s CIIE (Center for
Innovation, Incubation and Entrepreneurship)
Mentoring provided in ET Power
of Ideas programme
 Virtual Incubators:
• Services offered
– Virtual classrooms
– Discussion forums
– Bibliographic databases
– Case study databases
– Incubator membership
 Advantages
 Services are available to qualifying companies
throughout the community, rather than being tied to
one building or location;
 Member companies benefit because they don’t have to
leave their present location in order to access a wide
range of typical technology incubators services
 Internet is widely distributed enabling networks to
communicate effectively
 it provides easy and relatively inexpensive access
 How Incubators Are Set-up
Quite often at Government’s initiative.
Funding program – Request for
proposals
Incubator initiatives are then selected.
The incubators in the network receive:
A yearly grant
The right to apply for incubator project
Business Incubator Set up

Diagram
Important milestones for a successful business
incubator operation:

 Forming a strong managing board with an advisory

structure.

 Experienced managers and personnel for the incubator

 Careful selection, training at home and abroad, and

proper remuneration of the manager and team
Contd…
 Screening of the technical, business and
market potential of tenants
 Promotional campaign to mobilize community
support
 Involvement of private sector, through
subcontracting and other arrangements;
 Exchange of experiences through national
incubators and international network
Business Incubator Operation
 Process of Incubation
• Evaluation process: technical and marketing
feasibility
• Innovator joins an incubator
• Incubator invests resources for development
of the product and its commercialization.
• Assistance by Venture capitalist
Benefits of an Incubator
 Initiatives by Indian govt. to
support entrepreneurs
• The Indian government has recently commissioned
Entrepreneurship Development Institute of India
(EDI)
• Focuses on entrepreneurship education, training and
research
• Provides business oriented and job oriented courses
• It has six centers and offers various programs like
PGDM-BE, PGDMN, etc.
Incubatee himself…….

Mr. Kranthi Kiran Vistakula

CEO of Dhama Apparel Innovations
Pvt. Ltd.
 Product developed…
 Heat Exchanger Jacket

 Bagged Innovator of the Year Award

instituted by MIT's Technology Review India.

 'Entrepreneur of the Year'-Business World

Magazine
 Trendy way ahead…..
 Bagged Rs. 45 lakhs in order to commercialize
his product.

 Instigated Strong & Positive response from

Indian Navy, Police and abroad clients.

 Reliance Technology Ventures Limited has

invested into Vistakula’s venture.
Thank you