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							Business Incubation in Asia



         Wang Zhen
    Assistant Director of STIC
   Director of AABI Secretariat
    Asian Association of Business Incubation
 Founded on Apr. 30, 2002 in NBIA’s Conference
 Aim to promote business incubation activities by
  facilitating information exchanges among Asian
  incubators, incubator clients and related
  organizations.
 Members covers 14 countries or regions in Asia
  and Pacific Region including Japan, Korea, China,
  Malaysia, India, Singapore, Pakistan, Philippines,
  Kazakhstan, Kyrgyz Republic, Australia, New
  Zealand, Chinese Taipei and Hong Kong.
Asian Association of Business Incubation
 Activities
  AABI Website as an information platform
  AABI Incubator for International Business Incubators
  AABI Award for best practice incubator
  AABI Newsletters for latest information
  AABI Trainging Center for incubator managers
  AABI Journal for academic articles on business incubation
  AABI Backup Events
Asian Association of Business Incubation
 Organization
President:                            Permanent Honorary President
Mr. Wang Rong (China)
                                          Dr. Horiba (Japan)
Vice President:                       Honorary President
Mr. Annuar Mohd Saffar (Malaysia)
                                          Dr. Kim Hong (Korea)
Advisor:
Mr. Rustam Lalkaka (USA)
Mr. Wu Yikang (China)

Secretariat:
Shanghai Technology Innovation Center (China)
Asian Association of Business Incubation
     There are nearly 1500 incubators in AABI
 member countries or regions which account for
 1/3 of the total incubators in the world.
Different Incubation Model in Asia


             China

     “A Policy Tool to Promote
 Innovation and Entrepreneurship”
China

                  Background


    Technology Innovation Service Center ---- Incubator

    Sponsored by China Torch Program

    Government related

    Non-profit S&T service institution
China
                                Overview

       TBI Statistics (2006’)
   •   Total number: 534
   •   Space:19.69 million M2
   •   Tenants:39,491 (9,714 new)
   •   Graduates:15,815
   •   Employees:717,281
   •   National-level TBIs: 169

* The above data represents the
incubators included in the statistical
system of MOST, another 500 additional
incubators exist at local levels)
China
                      Origin

   UN expert suggestion to SSTC (now MOST)
    in 1987
   Feasibility study conducted
   First TBI in China:
     Wuhan Donghu Pioneers Center, June
       1987
   TBI as one of the major policy instruments of
    Torch Program
China
                    TBIs as a Policy Tool

     Missions:
        - Nurture technopreneurs and technology-based
         startups
     Functions:
        - Base for the commercialization of hi-tech
          research results
        - Community of entrepreneurs;
        - Linking between universities,research institutes,
          hi-tech startups and market.
China
                         Development
   The period of classic development
     The government offered special policies and investment in
      establishing physical facilities
     The incubators laid stress on transforming the existing
      achievements and nurturing the existing small enterprises
     The services were mainly physical facilities and various
      junior consulting
     They paid more attentions to social benefits rather than
      direct economic benefits
     Institutionally, as self-reliance organizations independently
      responsible for their own incomes and expenses,
     The incubators gradually evolve into corporate management
China
                      Development
      The period of diversified development
        directly serving the entrepreneurs
        wider services areas
        development of industry-specific (targeted)
         incubators
        venture capital combined
        profit-oriented development
        Internationalized development
China
                    Current Status

      Recent Development
        Diversified Models
        Sector Specific Incubation
        Multiple Ownership
        Networking at different levels
China
                                Diversified Models

              58 University-related Incubators such as those set
                up by Qing Hua University, Shanghai Jiaotong
                University, Tongji University, Chongqing University,
                Sichuan University
              45 Incubators for Returned overseas scholars
              32 Software Parks
              9 International Business Incubators
                                                           Dalian Incubator for Overseas Scholars




Tsinghua University Incubator     Hangzhou Software Park
China
                    Software Parks

   Major driving force
    for the development
    of software industry
    in China
         Total income: 55.5%     Northeast University Software Park
         Export: 45.7%
         Employees: 71.9%

   Rapid development
         Average annual growth
         since 2000’: 49.6%

                                      Xi’an Software Park
China
             Sector Specific Incubation

        -Shanghai Zhangjiang Bio-medicine Incubator
        -Beijing Manufacture Incubation Base
        -Beijing Advanced Material Incubator
        -Shanxi Yangling Agricultural Incubator
        -Tianjin Tanggu Marine Technology Incubator
China
                    Multiple Ownership




           14.17%
                                         Fully Gov-funded Public Orgs
                        9.45%
     0.79%                      11.02%   Partially Gov-funded Public Orgs
  14.17%                                 Independent Public Orgs
                                         SOEs

                                29.13%   Ltd.Compnies(PPP)
           21.26%
                                         Private Enterprises

                                         Dual-Identity Entities
China
                      Networking

   •Networking at different levels
    -Professional Committee on Technology Business
        Incubators under China National Association of STIPs
    -Regional Networks in west, north and mid-east China
    -Local Networks in Beijing, Shanghai and Hubei and etc.
China
             Characteristics

    Strong support from governments at
     different levels
    Close linkage between incubators
     and STIPs
    Comprehensive value-added service
     system
China
                       Achievements
     Entrepreneurialism promoted
     Platforms provided for entrepreneurs from
      universities and research institutes in China and
      from overseas to establish their own startups
     A large quantity of technology enterprises and
      entrepreneurs have been brought up, making
      remarkable contributions to economic development
      and industrial restructuring
     Major sources of innovative technologies,
      contributing 1/4 of all technology-based SMEs in
      China (including over 20 listed companies)
     Contribution in job creation
     INCUBATION conception spread
China
                      Challenges

    –Unbalanced development (east vs. west,
     hardware vs. software, number vs. quality)
    –Limited funding channels
    –Managers of incubators are insufficient in business
     managing experiences
    –Hardware facility expansion tends to undermine
     provision of value-added services
    –Interaction with other innovation promoters need to
     be strengthened
China

                        Future

     Reinforced as key players in creating
      innovation headstreams (“Growing Seedlings”)
       To reinforce the development of tech-based
         SME community
       To lower the individual risk and cost of the
         innovation activities undertaken by tech-
         based SMEs
China
    Incubation Model: Growing Seedlings

                       Funding System
                                                        Seedlings (Market)


                                Sprouts (Products)

        Seeds (Idea)
                                                            High Growth
                                                          Innovative SMEs

                                Entrepreneurial Team


 Innovative Technologies with
    Good Market Potential                  Fostering System
 Different Incubation Model in Asia


              Malaysia
“Building Sustainable Incubation Industry”
Malaysia
                             Incubators in Malaysia
  KEDAH
 KTM                                      MSC ZONE
 SB/KHTP
                                           MCIA
 PENANG                                    BT Multimedia
                                           N2N Ventures
                                                             SABAH
  USAINS


       PERAK
                                           MELAKA
  KLANG VALLEY                             MICTH S/B

    YTL E-Solutions Bhd                           SARAWAK
    BioEnterprise S/B
    Sirim Technology Inc.
    Skali E-Ventures S/B
                                JOHOR
    ISpring Capital S/B
                               UTM/BIP
Malaysia
                                Evolution of Incubators
Generation     Model                  Characteristics                Time              Incubators

                                Real estate
              Landlord
   1st         model
                                Shared facilities                 1988-1944         1 (tech) incubator
                                Reactive support

             Landlord +         Real estate
             Consulting/        Shared facilities                                  3 (tech) incubators
   2nd        Advisory          Proactive support
                                                                   1995-1998
                                                                                   30+ incubators overall
               model            Business Advisory Services

                                Real estate,                                    55 Incubators Nationwide
                                Shared facilities                 1999-2004
                                                                                 18 MSC Status Incubators
                                Proactive support
                                Access to Funding
             Facilities +       Co-Venturing
              Business          Mentoring & Coaching
              Advisory          Business Acceleration process
                                                                    2005-2010
   3rd        Services          Technology Labs
                                                                   (MSC Status            (In 2010)
                And             Focused Technopreneur
                                                                   Incubator→    100 Incubators Nationwide
             Mentoring           Development Programs
                                                                  Cybercentre→   30 MSC Status Incubators
              services          Technology & Business
                                                                    Cybercity)
                                 Incubator Development
                                 Consulting
                                Incubator Industry Development
                                 Consulting
Malaysia
          Federal Government’s Concern Over
           Progress of Incubation (1996-1999)

    Up to 1996/99, ALL (36) incubators were federal or state
     supported incubators.


    Too much dependence on federal government funding
     (both development and operation budget).


    No private-owned incubator.


    Success stories were lacking/not forthcoming.
Malaysia
         A Malaysian Model of Technology
                   Incubators
     Corporatizations of Technology Incubators/Parks.
     Partially supported by Federal Malaysian Government
     Receive only Development Budget, but no Operations
      Budget.
     Funding for Technology Excellence Centres
          - Information Technology Centre : Java Tech Devmt Centre,
             Virtual Reality, etc
          - Advanced Engineering Centres :Rapid Prototyping, CAD Lab,
            Automation, etc.
          - Biotech Centres : QC Lab, Standardization Centres,
            Extraction Plant, etc.
Malaysia

       Incentives for MSC Status Incubators
      MSC Status Incentives through the Bill of Guarantees for MSC Status
       Incubator
         No Corporate Tax for 1st Ten Years.
         Expedited Visa approval for Hiring of Knowledge workers from abroad.
         Etc.

      Strategic shared resources, business, technical advisory and technology
       labs support through NIDP/NINA
      Benchmarking and Networking through NIDP
      Incubator Manager Training
      Incubator Manager Exchange Program
      Access to MSC-TDF Programs, KHTP-PVED Programs, etc.
      Membership to National Incubator Network Association (NINA)
Malaysia
          Recent Successes of Incubation
                   in Malaysia
    Technology Park Malaysia has more than 20 public-listed
     companies that graduated from incubator program.

    MSC-Tech Comm Centre has 5 public-listed companies
     that graduated from their incubator program.

    16 new incubators formed in last 10 years.

    Nine (9) are private-owned incubators formed in last 3
     years.
Malaysia
    Collaboration between Public and Private
            Incubators (Case Study)
   Collaboration between:
     BT Multimedia Sdn. Bhd. (part of the British Telecom Group)   - (Private)
     MCA ICT Resource Centre (MIRC)                                - (Public)


   Both are MSC Malaysia Status Incubators & members of
    the Malaysian National Incubator Network Association
    (NINA).

   In 2006, at the SME ICT Global Leadership Forum, BT &
    MIRC signed a Memorandum of Understanding (MoU) to
    train small and medium-scale enterprises (SMEs) in
    implementing information communication technology (ICT)
    into their operations.
Different Incubation Model in Asia



        Chinese Taipei
 “Industry-Academia Collaboration
             by MOE”
Chinese Taipei
                                 Mechanism
                                      Steering committee         Policy
                                                                 Annual promotion plan
                                                                 Related rules

        Technology Licensing       Regional Industry-Academia             Incubator in the
        Office in universities        Collaboration Center                  universities

                                                   Administration (Investigate regional resources)
                                                   Matching (Industry and Academia)
                                                   Manage the collaborative laboratory
                                                   Establish the R&D team
                                                   Communication and coordination
                                                   Education and training
                                                   Consultation
      University funds           Subsidize the key programs by         Financial support from
                                    Ministry of Education              industry

                                 Technology Research Center in
                                     Ministry of Education
  Research center                                                        Research center
  Laboratory                        R&D from industry                    Laboratory
  Engineering center                System Integration                   Engineering center
                                    Commercial Test
Chinese Taipei

                     Supporting System

    Steering Committee

    Regional Industry-Academia Collaboration Center

    Technology Research Center in Ministry of Education

    The “Information Network” for Industry- Academia
     Collaboration
Chinese Taipei

      Introduce the Non-Government Resources to
        Participate into “Incubator BOT Program”
     Establishment of supporting government groups from:
        Public Construction Commission, Executive Yuan
        Ministry of Economic Affairs
        Ministry of Finance
        Ministry of Education


     Chose the demonstrative universities to setup Incubator
      through BOT since 2006
        National Tsing Hua University
        National Central University
        National Taiwan University of Science and Technology
Chinese Taipei

      Industry-Academia Collaboration Mode
     Training
         Implement the “Final mile program”
         Promote “Academic Program Degree”
         Make the Industrial R&D On-job Master Programs
         Try to set up “Specialty Academy”
     Interflow of people between Industry and Academia
         Broaden the rule of part-time job
         Broaden the rule of people interflow
         Modified the qualification of school principal
         Expand the personnel head-counts of “Industry-Academia Collaboration
          program ” in national university
     Implement Assessment and Teachers’ Promotion
       The outcome of industry-academia collaboration is added into the university
        performance measurement by MOE
       The results of the industry-academia collaboration is added into the teacher’s
        promotion consideration
     Reward mechanism
       Reward the achievement of Industry- Academia Collaboration
       Reward teacher and service of industry
Different Incubation Model in Asia


                Korea
“Commercialization of Scientific Knowledge
  Through University Based Incubator”
Korea


                     Commercialization
• Universities are an “engine” for economic growth and
    a source of new knowledge
     Fertile ground for new ideas
     Educate workers comfortable with new technology
     Focused on research involving revolutionary concepts
     Funded with a mandate to benefit society


   If Universities are such a great engine.
       - Engines must be properly designed and tuned
       - My car needs more than just an engine!
Korea


                 Approach of Universities
   Fulfill academic mission
     Educate world class researchers
     Produce world class research


   Facilitate commercialization of technology
     Business Incubator
     Technology Transfer Office


   Work with intermediaries to span the “chasm”
    between discovery and products
Korea
  Case Study: Business Venturing & Incubating
              at Hoseo University
                                                     Foreigners Industrial Complex
  Tangjeong TFT-LCD Cluster (Crystal Valley)               29 tenants
                                                           714,000㎡
                                                           ABB, GKN
     Samsung & Sony
                                                           Semiconductors, Auto parts
     5,652,000㎡                                            Mechanics

                                               Choenan 1st,2nd,3rd Industrial Complex




                                               A radius of 15km



                                                                   110 tenants
                                                                   2,023,000㎡
                                                                   Machines, Metals,
                                                                     Semiconductors
Korea
              Result of Business Venturing
                       (1999-2005)
                         30 Companies (Neosemitech, CST, Hisonic CMtech,
   Success Company
                         GayaAMA, etc.)

                         15 Companies (Seongwootechno, BikwangCS,
    Failed Company
                         Sinewave, etc.)

                         26 Companies (Bitonet, Tronel, WintechIC,
   On going Company
                         bokwangchemical, etc.)

                         3 Companies (Amotech, Inociptechnology,
 KOSTAC listed Company
                         Pamacodegien)

                         *Invest company: 6( 1M US$ )

                         KOSTAC listed company:3 (2.2 M US$)
      Angel Club
                         On going Company: 1

                         Failed Company: 2
Korea
 Hoseo University Model of Business Incubation
                 Developing Human Resources for venture starts-ups

                 ▶ Dept. of Industrial Venture Business in Eng. School
                 ▶ GSE, GSV




          R&D                                                        Management Support
  - Professors                   Specialists for venture           - Hoseo Consulting Corp.
  - Students


 Technology Transfer
  - TTC                                  TBI
                                         SBI
                                                                    Finance & Investment
  Education/Training
  - Venture Start-up                                               - Hoseo Angel Fund
    School                    Hoseo Techno Valley                  - Hoseo Venture Capital
  - Entrepreneur’s                                                 - Hoseo Seeds Fund
    Class



                             Success of Entrepreneur
Korea

            Result of Service Program
    Kind of     Number of     Kind of       Number of
    Service      Services     Service        Services
   Tax &           165      Funding             2
   Accounting

   Management      187      PR. &              21
   Consulting               Advertisement

   Law &           25       Financing &        18
   Patent                   Guarantee

   Government      44       Marketing          26
   Approval
Different Incubation Model in Asia



         New Zealand
New Zealand
     The Purpose and Background of BI
          Policies in New Zealand
    New Zealand Trade and Enterprise (NZTE)
  -is the New Zealand government’s economic development
   agency. NZTE established an Incubator Support
   Programme in 2001 to guide the development of an
   incubation industry focused on growing high tech,
   internationally focused businesses in its target growth
   sectors of ICT, Biotechnology and the Creative Industries.
New Zealand

     Case Study: The Waikato Innovation Park
    A not for profit company

 Which aims
  to enhance the sustainable competitive advantage of the New Zealand
   Agricultural Sector and Processing Industries

    Act as an “honest broker” for the Region – bringing Industry, Farmers,
     Universities and CRIs together to produce “pasture to the plate”
     projects.

    Counter our global weakness of being
             small,
             fragmented,
             competitive with ourselves,
             and isolated
New Zealand
   So what does this mean for the Region
  Some Regional AgBio Economy Impacts


     1cent change in milk margin = $4 million
     1cent change in meat margin = $6.1million
     $6.4 billion or 48.6% of Waikato economy
      derived from pastoral based Dairy, Sheep, Beef,
      Deer Farming and associated Processing
      Industries.
New Zealand

  Three distinct – but connected approaches

    The   Innovation Park
    The   Business Incubator
    The  AgBio Cluster – domestic and
     international
New Zealand

                The AgBio Cluster

 What is the role of the Innovation Park in an
  AgBio Cluster?
  To facilitate collaboration between New Zealand’s
   AgBio Companies.
  To act as the “honest broker” or middle man for
   the sector.
  To encourage internationalisation of NZ’s
   agritechnology and services
Different Incubation Model in Asia




           Singapore

   Business Incubation Facilities
Singapore

        Business Incubation Facilities
    EDB categorizes the incubators in following
     manner:
  - Incubation facility provider 16
  - Technology specific incubator 10
  - Universities, School, Research Institute based
     incubator 14
  - Foreign country incubator 17
  - Business accelerator (including consultants) 13
Singapore

              Available Support for BI

    The Source for BI Support (Organization or
     Department in Charge)
 -   Economic Development Board


    Available Support for the Operation of
     Incubation Facilities
 - use part of the subsidy from the LEAP program mentioned
     later in management of incubation facilities
Singapore
             Available Support for BI
  • Available Support for the Training of Incubation
    Managers
  - The EDB has the “Locally-Based Enterprise Advancement Program”,
     abbreviated as the LESP Program. For organizations called
     Multipliers (that is, organizations that support the multiplication of
     businesses, approximately the same meaning as Incubator), the
     EDB will provide 90% of the costs for one year including fulltime
     incubation managers, and running costs directly related to achieving
     “results”. Multipliers support the development of firms, and also lay
     the foundation for various kinds of new businesses to spring up.
     Once an application for subsidies is accepted, the incubator's goal
     becomes to establish 10 companies per year. Every 3 months its
     progress is evaluated, and money is paid according to the expenses
     incurred in those 3 months.
                Conclusion

Major characteristics of incubators in AABI
 1. Government background
 2. University related
 3. Technology based
 4. The emerging stage comparing with the
    incubators in Western Countries
            Future Development
1. Aim to improve the incubation ability and quality
2. Focus on the specialization of business incubation
3. Establish the information platform
4. Strengthen the international cooperation to share
   networking resources
5. Promote the inter-exchange among tenant companies
6. Cooperation between AABI and relevant international
   organization such as infoDev
           Welcome to XinJiang
    The mysterious region on the world
        famous ancient Silk Road
Shanghai---Xinjiang Technology Cooperation Fair
      Forum on Technology Innovation

          Aug. 27-30, 2007 Urumqi China

                      Sponsored by
         Asian Association of Business Incubation
                      Hosted by
         Shanghai Technology Innovation Center
Welcome to Shanghai in this Fine Autumn!

       Incubation Forum
 on International Cooperation

       Sep. 23-26, Shanghai China

                 Sponsored by
    Shanghai International Business Incubator
           Thank You!
Contact:
   Mr. Wang Zhen
   Address: 100 Qinzhou Road, Shanghai,200235, China
   Tel: +86-21-64839007 Fax: +86-21-64833567
   Email: stic@stn.sh.cn
   Web Site: www.incubator.sh.cn / www.aabi.info

						
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