Institutional Mechanism

Technology Business Incubators(TBI)

Background

The need for instruments such as TBI has been recognised the world over for initiating technology led and knowledge driven enterprises. Studies also show that such mechanisms help not only in the growth of technology based new enterprises but also in improving their survival rate substantially (from 30 per cent to over 70 per cent). TBIs also facilitate speedy commercialisation of research outputs. The TBIs usually provide following types of services:-

  • Market survey/ marketing assistance,
  • Business planning and training,
  • Organising management/ technical assistance,
  • Assistance in obtaining statutory approvals,
  • Information dissemination on product ideas/technologies,
  • Syndicating finances,
  • Arranging legal and IPR services,
  • Using facilities of the Host Institute (HI) at nominal charges,
  • Work space for a limited period
  • Common facilities of TBI such as communication, conference, computers.
Thus, the TBIs besides providing a host of services to new enterprises (and also to existing SMEs in the region) also facilitate an atmosphere congenial for their survival and growth. The essential feature of a TBI is that the tenant companies leave the incubator space within 2-3 years.

Objectives

TBIs are promoted to achieve the following objectives:

  • Creation of technology based new enterprises,
  • Creating value added jobs & services,
  • Facilitating transfer of technology,
  • Fostering the entrepreneurial spirit,
  • Speedy commercialisation of R&D output,
  • Specialised services to existing SMEs.

Criteria for selection of location

Ideally a TBI should be located near a source of technology and knowledge i.e. around R&D Institutions/Academic Institutions or it should have strong links with such institutions to ensure optimal use of the already existing expertise and facilities thus keeping the cost of the TBI on lower side. Locating TBIs in such location could also reduce time lag between technology development and its commercialisation. Further, as the success of a TBI largely depends on its location and management besides quality of tenant enterprises, following aspects relating to the HI need to be kept in view while selecting location of the TBI:

  1. R&D track record and subsequent commercialisation of R&D output,
  2. Dedicated team of R&D persons,
  3. Industrial milieu in the region,
  4. Proximity to other R&D/academic institutions,
  5. Infrastructure, facilities and expertise available,
  6. Strong commitment and willingness of the HI.

Thrust Areas

Each TBI would focus on not more than 2-3 thrust areas. The thrust areas for a TBI would be identified based on the following:

  • Expertise and facilities available in the HI,
  • Track record of the HI in the chosen areas,
  • Industrial climate in the region,
  • Market potential/demand in the region.

To begin with, TBIs are proposed to be promoted in following selected thrust areas which have potential for faster growth:

  • Information & Communication Technology (ICT)
  • Application of bio-technology
  • New materials including nano materials
  • Instrumentation and maintenance
  • Agriculture and allied fields
  • Garments and fashion technology
  • Services

Facilities required

The TBIs should mainly draw upon the existing facilities available in the HI including land and building. However, certain essential facilities, which need to be created in a TBI are given below:

  • Modern work space,
  • Communication facilities,
  • Computing facilities,
  • Vital equipment needed in identified area
  • Library & information centre
  • Training and conference facilities

Sponsorship

The TBI may be promoted by the selected HI and DST jointly. The HI has to provide the requisite land and building for the TBI. Other related and interested agencies could also be involved as sponsors.

Activities

Each TBI would be required to plan and undertake specified activities based on the identified thrust areas. However, the following set of activities is suggested as general guidelines:

  • Provide specialized services to existing SMEs in the region,
  • Facilitate technology commercialization,
  • Consultancy,
  • Training including short courses,
  • Technology related IPR issues, legal and quality assurance services,
  • Marketing,
  • Assistance in obtaining and other clearances,
  • Common facilities,
  • Assistance in preparation of business plans,
  • Technology shows/ technology clinics/ trade fairs.

Organisation Status

The TBI should itself represent a dynamic model of sustainable business operation and generate revenue as well as profits. As per the guidelines of the Department regarding legal status of new Technology Business Incubators it has become mandatory to register the new TBIs as an autonomous body functioning as a society registered under societies act of 1860/or as a non profit making section 25 company. The affairs of the TBI should be managed by an Advisory Board. The Board of the TBI should help not only in development of a strategic plan containing quantifiable objectives to achieve the desired results but also in managing the TBI efficiently and effectively. The Board should have representation from the promoters and reputed professionals. This may include representatives of DST, SIDBI, HI, industry, VC companies, Entrepreneurs, student bodies and tenants of the TBI. A committee should also be set up for selection of tenant firms.

Staff Structure

The day to day operations of the TBI would be looked after by the Chief Executive Officer/Managing Director and a team of selected personnel which may include one or two professionals having technical/managerial qualification and relevant industry experience to look after areas such as business planning, technology transfer, training and consultancy. In addition, an accounts cum administrative officer and one secretarial assistant may be inducted in the core team. To cater to the specialised and need based services, the TBI should have a panel of experts/ consultants. Their services may be hired as and when required on payment basis. Security and house keeping services may be arranged on contract basis.

Role of the HI

The Host Institution has to play an important role not only in the establishment of the TBI project but also in its smooth and efficient functioning. Only those institutions/ organisations that can provide land and built-up space for TBI and are also willing to share available facilities and expertise would be considered for setting up of the TBI.

An MOU would be signed by the TBI, HI and DST, which will clearly define the role of these three agencies. HI should demonstrate its commitment and responsibility towards the TBI project. The HI will provide a suitable built up area of atleast 10,000 sq. ft. where-in the TBI could be set up besides provision of utilities such as electricity and water. The HI will also ensure availability of following facilities to the tenants of the TBI on mutually agreed charges:

  • Lab/testing facilities,
  • Library,
  • Mainframe computer,
  • Faculty support.

Performance Parameters and Expected Output

The performance of TBIs would be judged based on the following parameters:-

  • Number of tenant enterprises promoted and their growth pattern,
  • Number of businesses graduating successfully and their growth,
  • Number of new jobs generated,
  • New technologies commercialized,
  • Quality of services offered,
  • Number of consultancy jobs undertaken,
  • Net revenue earned,
  • Return on Investment,
  • Upgradation/ modernisation facilitated in existing units.

Special Features of TBI

  • Dedicated management team
  • Well defined tenant selection & graduation system
  • A set of value added services
  • TBI to be run as a business entity
  • Periodic performance evaluation

Estimated Project Cost

Each TBI should prepare a detailed project proposal and work out the cost, based on actual requirements. A project implementation schedule may be prepared covering the key activity of the project. Since TBI is software intensive, greater focus should be laid on providing value-added services rather than facilities (hardware) to its tenants. Wherever possible, duplication of the facilities already existing in HI may be avoided and only need-based facilities may be proposed in the initial phase of the project.

Self Sufficiency

Each TBI is expected to become self sufficient within a period of five years from the date of sanction of the project. The TBI should, however, start earning from the very first year of its operation. The TBI should appoint a Project Manager with relevant experience and exposure to the business environment.

Contact

Interested institutions may contact Head, NSTEDB for further clarifications, if any. Two copies of the project proposal for the proposed TBI, as per the annexed proforma, may be submitted.

 
 
 

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