Introduction to Business Incubation in CEE and Hungary

Transcription

1 Introduction to Business Incubation in CEE and Hungary JÚLIA MOROVÁN, SECRETARY OF INTERNATIONAL AFFAIRS HUNGARIAN RECTORS CONFERENCE V I I I N T E R N AT I O N A L S E M I N A R O F T H E C O I M B R A G R O U P O F B R A Z I L I A N U N I V E R S I T I E S 2 9 O C T O B E R , K I N G S C O N F E R E N C E H O U S E, M A N C H E S T E R, UK

2 Summary of Presentation Explore Central-Eastern Europe Brief Introduction to Business Incubation Centers in CEE The Characteristics of Business Incubation Centers in CEE The History of Business Incubation Centers in Hungary The characteristics of Business Incubation in Hungary Business Incubation Models in Hungary Difficulties of Incubator Houses in Hungary Future prospects/possibilities Hungary s Potential 2

3 Explore Central-Eastern Europe Population over 100 million Leading in incubation: the three Visegrad countries: the Czech Republic, Poland and Hungary. Historical background: the fall of the Berlin Wall, change of the regime and complicated processes of economic transformation over the past 20 years. Industrial restructuring: new enterprises, warehouses turned into incubators, learning about new markets and business strategies. Growing markets, OECD, NATO and EU memberships. EU funds. Source: KKR Global Institute Report

4 The Characteristics of Business Incubation Centers in CEE National governments realizing the importance of business incubation. Despite the negative perceptions or misconceptions from potential Western customers or business partners, the number of international investors is increasing. Incubators reflect local, regional and national circumstances and priorities. Main aims: strengthening the market orientation, diversification and competitiveness, building growth in the community, introduce new technologies, promoting innovation, enhancing links between universities and research institutions % of businesses starting in incubators turn to be successful, while the rate for individual ones is only 30-40%. 4

5 The History of Business Incubation Centers in Hungary End of 80s Rapid growth of the number of enterprises 1990 Institutions were established to provide legal/market/management consultation 1991 Foundation of the Hungarian Business Incubators Association (Pittsburgh, US) Further incubators were established to reduce high unemployment, caused by the collapse of the traditional heavy industry Late 90s The Structural Funds of the European Union further supports the creation of business incubators International support (eg.: by the Flemish Government, the Prince of Wales) The European Union s PHARE program provides early-stage funding for Central and Eastern Europe 2000s European Union funds (Regional Operational Programmes ) supported the total of 107 incubators 2010s Govermental support (ATI 2013) The number of incubators increased significantly and many types were formed Communities, events, competitions, media 5

6 Business Incubators in Hungary Based on edited by dr. Fa bia n Brigitta 6

7 The characteristics of Business Incubation in Hungary No professional criteria regarding what qualifies an incubator house: varying significantly in terms of strategies, competencies, capacities and services There is no central database about the incubators: no exact data regarding the number of functioning incubators (40-50) Focus areas: service commerce industry and technology research and innovation Financial source in the form of capital investment (+state resources for projects lead by accredited technology incubators), crowd funding, international and national investors 7

8 Business Incubation Models in Hungary Traditional Business Incubator Enterprise development, market interests, return on capital and profit-seeking The hotel Only working place without providing any service. The Creative Incubator Creative incubators combine the functions of business incubators and creative ateliers in order to stimulate creative ideas and to make the best commercial use of them. University Business Incubator Providing opportunity to nascent entrepreneurs to benefit from the talent and resources located in the university and boosting local economy. Technology Business Incubator Property-based ventures providing a range of services to entrepreneurs and start-ups, including physical infrastructure, management support, technical support, access to financing, legal assistance and networking. Virtual Business Incubator Providing industrial property consultancy, determining the value of patent/project, business planning, marketing, market research, fund raising, project management, sale, appearance in foreign markets. Accelerators Making an investment in the companies enrolled in their programs (3-4 months). Non-profit Business Incubator Converting an unused property into an incubator house by using central, nonrefundable grants. Revenue should minimally exceed the expenditures. Science and Technology Parks An area managed in a manner designed to promote innovation. 8

9 Traditional Business Incubators Location Represented in all regions of Hungary Aim Creating new jobs Providing infrastructure, network opportunities general office services: printing, computers, photocopy, fax, conference room rental and counseling facilities consulting: legal counseling, innovation advisory specific services: stocking, specific databases, proposal writing and advising, safe data storing, delivery, interpreting and translation, parking, accounting long term rental fee with decreasing lease discount (1 st year: 15%, 2 nd year: 10%, 3 rd year: 5%) Tenants their number vary from 1 to 50 various areas are presented 9

10 University Business Incubators Széchenyi István University (2012) For students and startups: modern and inspiring working environment, office infrastructure, consulting services, interns among the students, legal and financial support, public and international relations, knowledge transfer, access to the expertise of professors and laboratories. Faculty of Economics, Corvinus University of Budapest & Faculty of Law, Eötvös Loránd University (March, 2015) Students providing legal and business consulting services for startups in the field of IT, communications and media. University of Szeged (in process) Letting offices and laboratories for rent helping startups and spinoffs with incubations services to start and develop their projects. 10

11 Science and Technology Parks Aim Supporting innovation and technology Technology transfer About Emphasis on co-location and the cluster effect between enterprises Generally together with incubators Regional and local focus (eg.: supporting crossborder relations) Services Demand driven assistance Workshops, warehouses Specific services: eg.: construction industry 11

12 Technology Business Incubators in Hungary Geographical focus Industry focus Capacity ACME international digital, finance, life sciences - Aquincum Bulgaria, Romania, Germany, Japan, Anglia, USA ICT, biotech, med-tech 10 projects/year AVEC Inkuba tor San Francisco, New York, Tokyo, London, Israel ICT, biotech, med-tech, design 10 projects/year DBH SeedStar Central Europe, Holland, Azerbaijan lifetech, greentech - Digital Factory - ICT Max 21 projects/year Kitchen Budapest USA, Western Europe No specialization 4-6 projects/year icatapult USA East/West Coast ICT Sim. max 7 projects / 6 months Incubo international ICT, media 4-5 projects/year InQbator USA East Coast, EU, Asia ICT Parallel 6-7 projects MyCo Europe greentech, cleantech 40 startup projects/year Traction Tribe USA ICT, med-tech 50 projects/2 years 12

13 "Accredited Technology Incubator" (2013) National Ministry of Economy and National Innovation Office s call for proposals to select and accredit technological incubators that are competitive in international markets, promote the build-up of start-up enterprises founded on R&D results achieved in Hungary or even in neighboring countries contribute to the successful completion of their R&D projects and to provide capital investment for a 2 year period 4 awarded organizations were supported with: 6,7 million EUR (incubators, startups) development of the incubator the process of the incubation of the projects support for market entry and facilitate capital raising 13

14 icatapult Global Business Development for European Tech Startups ATI accredited ABOUT: An open, heterogeneous incubator operating in English with global technology, bringing Central and Eastern European ICT technology startups to the world market. Foundation Period 2012 (Primus Capital and Digital Natives ) 3-24 months Check in prototype phase: the startup has tested the initial market reception (validation) heterogeneous team initial business model Incubator Incubated business model business management open mindedness desire to learn 14

15 Kitchen Budapest Change the world ABOUT: There are three main ingredients to a successful startup: knowledge, relations and funds. For 6 months, KiBu gives and guide the incubated through the product development, market entry and fundraising stages with their experts, media and investor partners. Foundation Period 2007 (Hungarian Telekom) 6 months Check in online application to learn about the idea personal encounters to meet the team common work to check the capacity for implementation Incubator professional mentoring in business, design and technology support with product development, market entry and fundraising National and international media and investor relations EUR, office space and tools Incubated commitment curiosity concentration 15

16 InQBator (IQB) Finance and international growth ABOUT: InQbator is a unique enterprise which combines entrepreneur creativity, structured Consultancy methodology and corporate leadership experience in business development. Foundation 2013 Period months Check in a good idea and relevant experience management experience market research being in the final phase of development international market entry potential Incubator overview of the business model developing a business strategy organizing the funding after the financing: managing the company's operation and financial performance leadership coaching international network Incubated knowledge about market and technology daily operational management sales and business development 16

17 Difficulties of Incubator Houses in Hungary Conservative mentality that is adverse to risk. Lack of role models and innovation culture across the region. Limited local government support and less mature corporate governance practices. Few places can provide high level services supported by technology, engineering and innovation tools. Brain drain. Low social interest and recognition for entrepreneurship. 17

18 Future prospects / possibilities Creating nationwide service network matrix. Using the accumulated technical capabilities and knowledge of higher education institutions. Increasing awareness of female entrepreneurship (at least 50% of the teams consist of girls or women). In Europe, the ratio of female founded startups are below 21% EU development funds: Ginop (Economic Development and Innovation Operational Programme: 7 million EUR for business incubator development. Strengthening the startup ecosystem in governmental level: tax and administrative burden reduction package, continuing ATI 2013, signing MoUs with international incubators forming startups. 18

19 Why Chico Buarque would launch a startup in Budapest? 19

20 Strategic location: in the heart of Europe Hungary s Potential English speaking and tolerant society, safe communities European standard of living at a reasonable cost for 1.000USD/month Exceptionally fast internet and outstanding 3G-coverage Unique mix of cultures, international student community Educated, low-cost labor force Successful startups: Prezi: the innovator of presentations LogMeIn: remote control system for accessing computers, innovative file sharing, data backup, and system management programs Ustream a platform to share experiences in real time 20

21 Thank you for your kind attention! I N C A S E O F F U R T H E R Q U E S T I O N S P L E A S E C O N TA C T M E V I A M R M R K. H U. 21