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
Innovation

Enterprise
Incubator

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

After the Elevator

Pitch
presentation, the
Mentoring by final shortlisted
experts is also will benefit from
scheduled for the a detailed ten
first short list. days program at
CIIE at the Indian
Institute of
Start up sessions
Management,
will be hosted at
Ahmedabad.
select cities across
India as per the
schedule
 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
 Expensive

Limited in
Duplicative
out-reach

Dependent Down-
on Skills-
government side of intensive
support Incubators
 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