Trends and Directions in Small Business Innovation and Incubation
New strategies are emerging and being tested and driven by the need for relevance and impact in a rapidly changing economic climate and increasing demand for local solutions. It is now not uncommon in the global innovation and incubation community to see a combination of the following models being created to facilitate innovation and growth for start- ups and established small businesses:
- Classic/Traditional Incubation
- University incubation
- Accelerators (with or without seed funds)
- Mentorship capital
- Sector Specific Incubation
- Virtual Incubation
- Online matching platforms
The evolution and diversification of models
The incubation landscape has changed significantly this century. New models, such as maker-spaces, co-work spaces, hubs and accelerators, have emerged to add value to the business innovation mix. Many of these have evolved from the concept of business incubation to become privately run commercial or not for profit organisations.
Enriching local ecosystems, numerous early stage business development programs like innovation and business plan competitions, start-up weekends, demo days and hackathons, help people connect and develop ideas and technology. Within most start up ecosystems, many traditional incubators continue to prosper, improving and evolving their level of collaboration and service.
Distinctions are emerging between entrepreneur led and investment led incubation. This means that incubators now have the option to assess their role in cultivating early stage entrepreneurs and instead, collaborate with other models established for this purpose inviting them to be feeder channels for establishing businesses to benefit from residential or virtual incubation support.
A number of possible future trends have been identified within the global business incubation industry, particularly with respect to accelerating innovation, growth and employment by established small businesses
Even though business incubation is normally applied to new starts there is no reason why it cannot be used to support existing small and medium enterprises, which in particular environments may achieve greater success for local and state economies. For example, through it’s development of a number of agribusiness innovation centers, the World Bank incubation program, InfoDev, has found more potential in the short to medium term incubating existing small and medium agro processors than starting with fresh new starts. Supporting this view, Mr Francisco Medina, Deputy Secretary, Jalisco State Ministry of Innovation, Mexico, suggests that: “It is easier to nurture an existing SME even if it is micro, than to stand the pangs of birth.”
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Author acknowledgement: Mr Julian Webb, BIIA Board Member, Director Creeda Projects and Business Consultant to the World Bank InfoDev Program.
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