ABOUT
Theme: Innovation
Cross-cutting themes covered: Business incubation facilities
Name of project: Business Innovation Centre
City: Prague
What is it?
The Business Innovation Centre (BIC) was an 800m2 business incubator, which supported innovative small companies in the high-tech sector to start up and grow. In particular, the incubator supported spin-offs from the Czech Academy of Science’s Technology Centre.
Who is it?
The Business Innovation Centre was led by the Czech Academy of Science’s Technology Centre.
Where is it?
The Centre was located in the campus of the Czech Academy of Science. The project worked with spin-off companies from the university.
Who funds it?
- The rents of small businesses residing in the incubator were subsidised by the EU PHARE programme and by the Czech Ministry of Trade and Industry.
- Due to legal reasons, however, the rents received could not fund the development of the incubator, or finance project staff. In the end, financial assistance for this came from the United Nations Industrial Development Organisation (UNIDO).
MAIN ACTIVITIES
How does it work?
- Provision of affordable workspace: Companies were offered a space in the business incubator at a subsidised rent. Innovative companies were provided with a decreasing subsidy (50% - 30% - 15%) to cover the cost of rent and other facilities during their three years in the incubator.
- Support for innovative businesses: The incubator provided a package of services to resident businesses, including:
- Intensive business development support
- Help to market services abroad
- Support with technology transfer projects
- Information on how to access European and national financial resources for R&D projects, including assistance in preparation of project proposals, and
- Help with access to finance
The first three hours of consultancy were free to resident businesses; thereafter, services were subsidised up to 60%.
Anything else?
- Promoting spin-offs from the university: Generally, there are few incentives for employees of research institutions in Prague to create innovative spin-offs. The fact that universities are not allowed to own shares in joint-stock companies also complicates the setting up of spin-offs in the Czech Republic. The majority of incubated companies were spin-offs from the Academy of Sciences. Most of the firms were technology-orientated (biotechnologies, fine chemicals, waste water treatment, ICT, modems, electronic devices, processes for the food industry).
What are the results?
- From 1993 to 2002, 53 small companies applied to the BIC, of which 34 were invited to the selective evaluation procedure. (This assessed the value of the companies’ business plans and their economic viability).
- A total of 21 of these companies were selected to enrol to the BIC.
Is it successful?
- Of the 21 accepted firms, 18 expanded and left the BIC; only three out of 21 are no longer running.
- Approximately 150 jobs were created during the existence of the incubator.
- The university is now planning to open a new business incubator, based on the BIC model, in the deprived urban area of Vysočany.
WOULD THIS WORK IN YOUR AREA?
Is the model transferable?
Essentially the incubator model, which acts as an intermediary organisation between the R&D (research and development) and business worlds and has an orientation to innovative spin-offs, is transferable. Moreover, the services offered to businesses by the incubator, such as help to market products internationally, are also transferable elements of the project.
Building on local competitive advantages?
The BIC project was able to build on several competitive advantages which may not be available elsewhere, such as a high concentration of R&D facilities through the Academy of Sciences and a skilled workforce.
What are the barriers to transferability?
Lack of financial resources could pose a barrier for transferability; the BIC incubator was funded by the public sector. In addition, lack of space could also be a challenge when setting up a business incubator elsewhere. According to other European experiences in this field, a business incubator should be at least 4,000m2 in size, in order to ensure financial self-sufficiency.
Entrepreneurship
