Growing Food, Products and Businesses

Growing Food, Products and Businesses

Applying Business Incubation to Agribusiness SMEs

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infoDev's global good practices assessment, which was released today, presents lessons learned from 10 case studies of agribusiness incubators in low and middle income countries, including Brazil, Chile, India, Malaysia, Mexico, Mozambique, Timbali, Uganda, India, and Indonesia. 

UPDATED (May 22, 2014): The full texts of the 10 case studies are now available for download. These case studies highlight best practices and lessons learned from across the globe for developing and sustaining agribusiness incubators. 

Growing Food, Products and Businesses

infoDev

Agribusiness incubation is presented as one approach that can contribute to commercialization and modernization of agriculture, as well as the promotion of a competitive indigenous agribusiness industry.

Other approaches include (i) strengthening farmer organizations, (ii) investing in large-scale agribusiness, and (iii) value chain development. Within this spectrum of complementary options, agribusiness incubation specifically aims to facilitate new, indigenous, firm entry by nurturing early-stage innovative enterprises. The goal of the report is to demonstrate that new business models can operate profitably and have a catalytic effect in the sector. Incubation is a very targeted approach, selective in nature, offering growth-oriented entrepreneurs a combination of tailored services.

In the framework of the study, different agribusiness incubator types/models have been explored in the context of real-life examples. The report features 3 types of agribusiness incubators including (i) agribusiness sector/value chain incubators; (ii) agricultural research commercialization incubators; and (iii) technology transfer incubators. Within each type, there are significant differences in terms of forms of public-private partnerships, affiliations, target clients, business models, and organizational design.

While incubators operate at vastly different scales (i.e. starting capital ranges from US$10,000 to US$50 million), the impact and cost benefit analysis conducted indicates that agribusiness incubators can be effective in creating sustainable and competitive enterprises and benefits that outweigh the costs, while diffusing a number of technologies, as well as product and process innovations. The report identifies a number of critical success factors for an intervention of this kind; 1) help clients manage risk ; 2) understand the details of the value chain; 3) maintain a broader goal of demonstrating innovative business propositions so as to stimulate broader sector take-up; 4) adapt the focus and business model of the incubator; 5) proactively identify and promote higher value market opportunities; 6) design and operate the business incubator in line with good practice, including ensuring a strong selection process which identifies and cultivates innovative, growth oriented entrepreneurs; and 7) developing strong partnerships with the public and private sector.

Watch the case studies from Africa, Asia and Latin America in the Resources section. 

To learn about the use of ICT in agriculture and access the ICT in Agriculture Sourcebook developed by infoDev in collaboration with the Agriculture and Rural Development Department from the World Bank (ARD), visit: http://www.e-agriculture.org


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