infoDev publishes ...

infoDev publishes two new studies on the use of Business Incubators

These studies provide a tool for establishing sustainable incubators in developing countries.

These studies provide a tool for establishing sustainable incubators in developing countries.

infoDev's Incubator Initiative, which was launched in 2002 with support from the Government of Japan, consists of a global network of nearly 300 incubators in over 80 developing countries assisting 20,000 enterprises which have created more than 220,000 jobs.

These organizations reflect the enormous diversity of business models for delivering business development services to ICT entrepreneurs, and the common and unique challenges faced in the respective local environments. With these studies, infoDev aims to provide a useful tool for anyone considering setting up an incubator.

A Model for Sustainable ICT Incubators in Sub-Saharan Africa

While technology incubators in the US and other developed countries have an implied mission of moving companies through a program, graduating them and sending them out into the community as part of a larger economic strategy, the

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 absence of support infrastructure in the Sub-Saharan countries in question (excepting South Africa) is less well developed and there may be less incentive to graduate to another facility. In addition, the access to services which may be found in the local neighborhood in developed country incubators may be completely unattainable in Sub-Saharan Africa. Finally, there is the ever-present question of access to capital which, while available in the developed world is often simply non-existent outside of it.

To explore this area further, infoDev commissioned a study, with support from IFC, that had two primary aims:

  1. Draw lessons from sustainable ICT business incubators to develop a model that could be implemented at scale in developing countries, particularly in the Africa region; and
  2. Propose an investment framework for evaluating prospective and existing ICT business incubators, as well as innovative mechanisms for addressing the financing needs of the incubated SMEs.
    The report produced from the study includes:

The findings from the study are provided in the report and include the following:

  1. Results from detailed case studies of sustainable ICT business incubators in Chile, Colombia, Armenia, Jordan, and South Africa;  
  2. A good practice ICT incubator model based on the lessons drawn from these case studies, including how this model could be adapted and implemented in the Africa region;
  3. Recommendations on how to evaluate a business incubator as a potential investment opportunity; and
  4. Recommendations on how to leverage business incubators to address early-stage financing needs of SMEs

Mixed-Use Incubator Handbook

Business incubation formally began in the US in the 1960s, and later developed in the UK and Europe through various related forms (eg. Innovation centres, technopoles/science parks). It is recognized as a way of meeting a variety of economic and socio-economic policy needs.  

 

In general, an incubator is a physical location that provides a defined set of services to individuals or small companies. This may include specific types of office space, flexible lease terms, access to technology, financing, and technical assistance (such as marketing, legal, finance, HR, and other business development services). By locating similar or complementary entities in proximity to each other, the incubator may also play a critical role in promoting knowledge transfer, both formally and informally.

Recently in developing countries, and under the guidance and promotion of organizations like infoDev, incubation has become an interesting approach to accelerate the development of technologies, industries and business skills. However, it should be noted that the needs of these communities can often be radically different to a more mature corporate environment where education, business training, and public institutional support may be a completely different context to Europe and the United States.

This report is aimed at the context of developing countries, and is intended to be a useful tool for anyone considering setting up an incubator.

To learn more about infoDev's global business incubator network, visit us at www.infodev.org/idisc


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