30 June 2008
The infoDev Network of Business Incubators and Technology Parks in Eastern Europe and Central Asia conducted a survey to better understand the motivations behind the internationalization opportunities that business incubators face as a result of globalization. The findings were presented by ECAbit members at the International Conference for Entrepreneurship, Innovation and Regional Development 2008 held in Macedonia.
This information has been compiled from the ECAbit website.
Globalization urges incubators to provide among other services to their tenants international services to their clients such as information and business contacts, import or export consulting, international marketing, technology sourcing abroad and various other technology transfer services. Even in cases where incubators are governmentally or nationally supported, there is a constant need to attract new funds through international projects.
Despite the vast growth of business incubation literature in recent years, focused primarily on incubator-tenants relations, little attention has been paid to partnership models and strategies among different incubators. Partially, this is due to the nature of incubation processes (predominately) taking place in developing countries and also in developed countries (up to a decade ago) – it is rather local, with technology transfer related/requiring international networks.
The existent studies on networks of business incubators either reflects on experience of (national or regional) associations of business incubators, or donor-centered and coordinated networks of grantees working on the same project (with standardized services or not). There is little documented evidence about the motivation to participate in a network of business incubators. Cooperation strategies and knowledge transfer experience between incubators.
We tried to fill this gap by doing a small-scale survey among 24 incubators from 12 countries that are part of the emerging ECAbit network. The interview was conducted in a form of a standardized questionnaire emailed to executives or incubators managers, which includes both open and closed questions (single or multiple answers possibles) on current and planned provision of international services, existing regional or country preferences for business cooperation of incubator clients, international networking of incubators in terms of formal/informal participation in networks, cooperation with a particular organization from a foreign country, projects participation and cooperation with research organizations and finally incubator’s own preferences to cooperate with similar organizations from other countries.
The questionnaires were distributed twice (in July and August 2007) and then again in March 2008 (to non-respondents and to those already responded if there are any significant changes appeared after completion of questionnaires in September 2007). We received altogether 14 responses from incubators from 10 countries, which corresponds to a 58% return rate (measured by number of incubators). Countries include: Armenia, Byelorussia, Bulgaria, Kazakhstan, Kyrgyzstan, Romania, Russia, Turkey, Ukraine and Uzbekistan.
Not surprisingly all incubators provide international services to its clients. Most of them however stay on a broad level as provision of international business contacts (mainly through the networks and international partners of incubators), information services and facilitating participation in international networks and programs. Very limited (3 of 14) provide import and incubating innovation. Altogether 5 export services and consulting. At the same time emerging star in terms of services is international technology transfer (currently 7 provide those services and 3 are planning such).
At the same time clients seem most interested in getting international contacts, finding and selecting partners. From a geographical perspective clients are most interested in doing (new) business with counterparts from Russia and Kazakhstan (over 50%), US and EU countries. This is in our view natural since these countries/regions represent important target markets within CIS countries (representing the majority in the sample). At the same time geographical preferences of incubators themselves are more dispersed than their clients, a bit more focusing on EU countries. This is quite reasonable, since incubators are predominately donor funded and EU provides a lot of funding opportunities for cooperation projects, advancing quality of incubation, networking and technology transfer. At the same time, new partnerships at incubator level could far more easily transferred in a new business opportunity.
International networking of incubators happens both on a bilateral level, within formal projects involving several organizations or within the framework of an association or network. Besides ECAbit network, which was the staring point for our research, a key additional network is SPICE Group. The most important distinction between the two networks (besides the fact that SPICE is older/established, global, larger and more influential) is that ECAbit predominately involves organizations, while Spice involves individuals. On third place of networks listed by participants of the research comes the EEN network (European Enterprise Network), the successor of IRC (Innovation Relay Center) and EIC (Euro Info Centres), which merged February 2008. Organizations from Bulgaria, Romania, Russia and Turkey are part of it. Then, within the context of the global infodev incubator network, there are two more World Bank initiated networks such as Global Development Gateway and Global Distance Learning Network, which interplay with the ECAbit through participation of more than one partner in both or three of them (Bulgaria, Turkey, Mongolia). Others networks that incubators participate are Southeast European IT Association, KABIC, AABI, CABIN, NBIA, IRE and others.
The fact that incubators are predominately funded through donor projects in our view explains why international networking is far more important to incubators than for their clients. The benefit for clients usually comes as a spill over effect or positive externality (if it is not directly written as a service in the international project, an example of which is IRC/EIC/EEN type of projects). Actually, even if clients pay close to market prices to incubators (rent and services) it is not financially possible to fund the international networking of the incubators. This market failure is clearly recognized both by the EU and the World Bank’s InfDev program respectively. Thus, donor funding significantly contributes to international networking (between 50 and 70% and in some cases of poorer countries up to 100%).
Even with the small timeframe of its existence, ECAbit and the global business innovation network of infodev proved to be successful in providing opportunities for knowledge and experience sharing and collaborative projects development (ranked the top two motivations by incubators to participate in networks, associations and collaborations). Unfortunately we do not have reliable statistics on both collaborative attempts and projects approval to identify the most important cooperation attractors but suspects are EU countries, Kazakhstan, Russia and Ukraine.
For further information, including two country case studies on Bulgaria and Turkey, please download the report here.