Brief Overview of The Baseline Study, and ASEAN Business Incubation Models

Hadi K Purwadaria Project Coordinator ASEAN Team StudyKemkop dan UKM, Division International AIBI hadi_purwadaria@yahoo.com ASEAN Workshop on Strengthening SME Business and TBI Bogor, Indonesia, 14-15 June2013

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Institution of Technology Business Incubation

The institution doing incubation is called Technology Business Incubator or TBI

TBI is an organization that has physical facility and provide services in nurturing SMEs

It may be under a university, government body, or private sector, and commonly working based on publicprivatepartnership concept

It could be a for-profit or not-for-profit organization

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BACKGROUND
ASEAN Leaders Meeting, Hua Hin Thailand, 2009 : SME development in ASEAN will be enhanced through Business and Technology Incubators Assessment should be carried out for the progress and model of best Business and Technology Incubators for ASEAN

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ASEAN PROJECT OUTCOMES

ASEAN Business Incubation Models ASEAN Business Incubator Network

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RESPONDENTS
10 AMS @ 3-4 business incubators or institutions planning to establish business incubators (Cambodia, Laos PDR, Myanmar), and stakeholders Respondents also joined the Study Team to one AMS other than its country Design has intentioned to start the ASEAN network

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BRIEF OUTCOMES OF BASELINE STUDY

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1. ASEAN BUSINESS INCUBATOR MODELS : ICT BUSINESS INCUBATION MODEL PROCESSING BUSINESS INCUBATION MODEL: agriculture, bio-technology, manufacturing, general services VIRTUAL BUSINESS INCUBATION MODEL
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Characteristics of BUSINESS INCUBATION MODELS : Type of incubator, funding support, incubator clients, pre-incubation program, incubation period, delivery program, space for clients, other facilities, funding for clients, location

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ICT Business Incubation Model

Criteria Type of Incubator Funding Support Incubator Clients Pre-incubation Program Incubation Period Delivery Program Space for Clients Other Facilities Description For Profit or Not-for-Profit Private or government supported University graduates A required part of the incubation model 6 months to 5 years Inside incubator building Open space, or private room Hi-speed internet network, office, meeting rooms, and get together spaces. Venture Capitals, angel investors, or government

Funding for Clients

Location

On university campus, Techno or Science Park (TSP), or private building

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Processing Business Incubation Model

Criteria
Type of Incubator Funding Support Incubator Clients Pre-incubation Program Incubation Period Delivery Program Space for Clients Other Facilities

Description
For Profit or Not-for-Profit Private or government supported University graduates or general public Optional 3-5 years Inside incubator building Mostly private room, but some open space Internet network, office, meeting rooms, and get together spaces. Access to pilot plant, workshop, and laboratory Mostly government, some are angel investors. On university campus, Techno or Science Park (TSP), or private building
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Funding for Clients Location

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Virtual Business Incubation Model

Criteria Type of Incubator Funding Support Incubator Clients Pre-incubation Program Incubation Period Delivery Program Space for Clients Other Facilities
Funding for Clients Location

Description For Profit Private General public None

3 months to 2 years Via internet network None Internet network, office, and meeting rooms Venture Capitals, and angel investors Private building

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2. PROFILE ASEAN BUSINESS INCUBATORS: Developed : Malaysia, Singapore, Thailand Developing : Brunei Darussalam, Indonesia, Philippines, Vietnam Starting : Cambodia, Laos PDR, Myanmar
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Criteria for Level of Incubator Development

Level No of Incubator s Existing Sci & Techno Park Availability of Government Funding to Incubator & start-up Available Not available or limitedly available None

Developed Developing

Over than 80 3-80

1-3 Seedling-2

Starting

None-2

None

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Country

No. of Incubators

No. of Companies incubated 30 (estimate) 400 (estimate) Less than 10 Less than 10 2000 None 100 (estimate) 1800 412 47 2,375

Brunei Darussalam Indonesia Cambodia Laos PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam Japan

3 40 1 1 110 None 10 120 89 11 190

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APPROACH OF DEVELOPED BUSINESS INCUBATOR DEVELOPMENT Full continuous support to business incubators is not cost centre. Treated as a profit centre in the long run : technology based growing enterprises, government income, employment provider, spin-off and multiplier effect , regional market share

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Examples of Government Full Support

Singapore :
The $30 million Incubator Development Programme (IDP) provides Incubators and Venture Accelerators a grant to enhance capability development programmes for innovative startups. IDP provides up to 70% grant support to incubators and venture accelerators in areas such as : Programmes To Nurture Start-ups Costs of introducing programmes that help start-ups develop new products/services, obtain business financing, improve market access, etc Mentoring Start-Ups Hiring mentors to provide management guidance to start-ups Operating Expenses Costs incurred to market services/events, hire incubator managers, train staff, provide shared services/equipment for start-ups, etc

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Singapore : The National Research Foundation (NRF), has Technology Incubation Scheme (TIS) for start-up companies. NRF-TIS will co-fund up to 85 percent of total investment per company, or up to S$500k (US$400k), with the rest topped up by the venture firm. The incubators can choose to buy out NRFs equity share within three years of investment, at a price of 1.1 times capital in the first two years, and 1.15 times capital in year three. The scheme is also provided to private L/O/G/O incubators
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Examples of Government Full Support

Thailand :
NSTDA

built and operated the Thai Software Park and incubator, and the Thai Science Park and incubator. NSTDA built and supported the operation of business incubators in the state universities all over Thailand NSTDA is building 5 more Science Parks including agricultural science Park in the L/O/G/O provinces
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Examples of Government Full Support

Thailand :
In the anticipation of ASEAN 2015 regional market : launch program by Min. Education to provide soft loan to students and graduates (max 5 year after graduation) who submit business plan to selected 63 business incubators :gov. and privates. Amount soft loan 30 K USD per start-up company for 5000 grants in 2013, 10 thousand in 2014, 20 thousand in 2015, and 40 thousand in 2016. Soft loan with no interest, and paid back in 2-5 years. L/O/G/O
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Examples of Government Full Support

Malaysia :
Government

built and operated the Technology Park Malaysia, and Kulim Techno Park 2006 : Establish Growth Acceleration Fund for SMEs 2012 : SME Domestic investment Strategic Fund to spur the technological growth Built and operate L/O/G/O Business Incubators for Handicraft in many states. 9/23/2013

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BENCHMARKING OF ASEAN TBI TO JAPANS

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Business Environmental General : Population, M GDP x1000 USD/cap Year TBI started No. TBI National Asc

JAPAN

MALAYSIA 27.56 16.9

SINGAPORE 5.08 60.4

THAILAND 68.7 10.1

128.05 36.3

1986
190 JBIA

1995
110 NINA

1996
120

2005
89 Thai BISPA

Government Support : TBI Building & Operation Seed & Growth Fund for incubatees Research & Technology Innovation Fund for incubatees Tax Incentive for VC & 22 Angel Investors

+
+ +

+
+

+
+

Only seed fund +

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Business Environmental Non-Government Support : Venture Capital & Angel Investors Community Funding Resource for TBI Operation : Space Rental Membership Fee Institution Owner Incubation Services Government Private Sector Community

JAPAN

MALAYSIA

SINGAPORE

THAILAND

+ +

+ + + + + + +

+ + + + + +

+ + + + + +

+ + + + + +

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Business Environmental Establishment of Science & Techno Park Other Supporting Institutions : Expert Network Technology Licensing Office IPR Office Stock Market Ministries Involved

JAPAN

MALAYSIA +

SINGAPORE +

THAILAND +

+ +
+ Big and Small METI MEXT

+ +
+ Big MITI MOSTI

+ + Big SPRING Min. Trade NRF

+ + Big MOST Min. Edu Min. Ind

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Business Incubators in Pictures Indonesia

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Bandung Digital Valley

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Bandung Digital Valley

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SOLO TECHNOLOGY PARK

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Business Incubators in Pictures ASEAN

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Small World Group, Private Business Incubator, Singapore

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hub
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singapura

Thai business incubator, Thai Science Park

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Inkubator Bisnis, Thai Software Park

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MTDC business incubator, Malaysia

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Technology Park Malaysia

Cyberjaya

Kulim Hi-tech Park

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iCentre, Brunei Darussalam

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TechnoHub, private business Incubator and Techno Park, Philippines

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Saigon Hi-tech Business Incubator and Saigon HiTech Park, Vietnam

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Agricultural Hi-tech Business Incubator and Tech Park, Vietnam

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3. ASEAN BUSINESS INCUBATOR NETWORK Future Recommended Program ASEAN Common Fund

ASEAN Co-incubation Program Other Programs : data base information : mentors & experts, best practices model, success incubatees; training for incub. manager and start-up companies; annual meeting
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Thank You!

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