2017, witnessed a boom of incubators in China, especially driven by the government’s appeal for mass innovation and entrepreneurship. It is estimated that the number of Chinese incubators increased by over 5,000 in 2017, the equivalent of the total number of Chinese incubators for the last 26 years. While there are around 10,000 incubators around the world, around half of them are based in China. Now you can tell how hot the Chinese incubator industry is.
As China seeks to innovate and upgrade its economy, it has managed to developed many regions that can be rightly associated as the Chinese Silicon Valley.
The people in the packed room listen intently as the speaker spells out the virtues of adaptability, creativity and his own personal refusal to box himself in with a job title on his business card. Those sitting in the room crane their necks to hear his words. The last eight questions raised for the speaker were not having background of tech companies or either venture capital firms indeed they were the one who were so engrossed in this study session that they took inspiration for tech buzzwords dominating their entrepreneurial startups.
It sounds like a scene from Silicon Valley, but instead that event hosted by Dr Regen Lee, Director Zhenjinag National University of Science and Technology Park, China. In China drive to transform itself into economy centered on innovation, these grass roots scenes full of eager, ambitious start-ups have definitely played a significant role. Now, let’s review what are technology incubators, science and technology parks and how they can help develop economies like Pakistan.
Technology incubator schemes provide workspaces for start-up firms to benefit from shared facilities and a range of business support services on preferential and flexible terms that would otherwise be unavailable through markets. Such support tends to be time-limited and is intended to support young firms during the most vulnerable stages of their development. Incubators are commonly found attached to research universities and PRIs, though they may also exist independently of such institutes while maintaining close ties. In this way, technology incubators constitute conduits for knowledge flows between public sector research groups and the commercial world of applications.
Technology incubators are targeted to provide the conditions for high-tech start-ups to grow and prosper. Accordingly, they can be important in supporting the generation and survival of spin-offs from research universities and PRIs. At the same time, they can foster other activities conducive to public sector research and that contribute to innovation, including technological development, R&D collaboration, advice and consultancy, and even inter-sectoral mobility through the employment of graduates and researchers by tenant firms.
Technology incubators can help offset some of the constraints typically faced by research universities, researchers and high-tech SMEs when they seek to commercialise science and technology knowledge.
In most OECD countries, research universities and PRIs have increasingly sought to commercialise their research results through the generation of spin-off firms. However, such institutes are mostly focused on performing research and teaching activities and have traditionally lacked a supporting environment for starting new firms. Technology incubator schemes are part of broader attempts by funding organisations to re-balance the activities of such institutes towards more commercialisation activity. They provide dedicated workspaces, including laboratories and workshops that would otherwise be difficult for start-up firms to access. They also act as a focal point for risk capital, funding organisations, and potential employees attracted to a critical mass of high-tech commercialisation activity.
Researchers often lack the capabilities and networks to successfully start and run businesses. Technology incubators are helpful in that they provide a range of business services, including training, mentoring, finance advice, market research and technical consultancy. Many researchers involved in spin-off activity also wish to maintain their research positions in their institutes. As many technology incubators are institute-owned and/or operated, this is often possible.
High-tech SMEs are often attracted to technology incubators on account of the latter’s proximity to research universities and PRIs. This reflects incubators being well placed to provide scientific support through direct links between tenant firms and research groups. Technology incubators can also facilitate peer-based learning among tenant firms.
Besides this, there are several factors should be considered when implementing technology incubator schemes. Firstly, availability of public funding while technology incubators earn income from their services, this may be insufficient to support all of the infrastructure and services they can usefully provide. Technology incubators may therefore be partly dependent on government funding for their long-term operation. The extent to which such commitment can be accommodated will depend on the public sector research funding regime that prevails.
Moreover, there should be wider business environment the geographic location of technology incubators is particularly important. Proximity to markets and financing, but also an industrial ecology that sees agglomeration in clusters, can be highly beneficial to tenant firms. Success is much harder where these conditioners absent. Furthermore, IPR regimes need to be sufficiently robust to protect the largely intangible assets owned by tenant firms.
Most importantly, there should be availability of know-how and skills as setting up and managing technology incubators require certain types of skills that tend not to be widely available and that take time to learn. As much as possible, arrangements should be put in place for incubators to exchange good practices.
In contrast, science and technology parks are business support schemes offering infrastructure and various support services to high-tech SMEs. They tend to have formal and operational links with centres of research excellence, such as research universities or PRIs, which enable technology transfer, and are viewed as a means to create dynamic regional clusters of innovation. Although science and technology parks vary greatly in scope and size, they have become significant policy instruments for innovation policy in many OECD countries. Consequently, governments often support their creation and development through various financial and fiscal incentives.
Science and technology parks seek to encourage and support the start-up and incubation of innovative, technology-based businesses through the provision of collaborative links with public sector research. Specifically, they seek to influence firms’ technological development by nurturing R&D collaboration and inter-sectoral mobility with public sector research organisations, and by providing access to their facilities and expertise. In doing so, they accelerate the transfer of research findings from public sector research to markets.
Science and technology parks can help to overcome some of the constraints faced by high-tech SMEs when they seek to undertake R&D efforts to launch new innovations on the market. Fragmentation and weak or missing linkages are common problems in innovation systems. Science and technology parks can help overcome these problems by agglomerating high-tech SMEs, public sector research and other business support services. At the same time, they can contribute to the development of a critical mass of high-tech SMEs and the emergence of new high-tech regional clusters.
In order to conclude, Pakistan should take an inspiration on how technology incubators and science and technology parks can be established. We need to rethink for such beautiful structures with best exploitation of our national resources without the aim of monetary corruption and indeed for a better and high tech prosperous nation.
The writer is a Master Trainer/Advisor at the Pakistan Industrial Technical Assistance Centre Lahore, under the Federal Ministry of Industries and Production, Islamabad.