Bhavana Desai walks us through the history of business incubation in the UK against the backdrop of UKBI’s role in the industry

2013! UK Business Incubation (UKBI) celebrates 15 years of acting as a catalyst to extract the maximum benefit from business incubation practices in the UK. From the beginning it has helped governments and stakeholders to build thriving business incubation environments that make significant contributions to economic growth locally and nationally, as thousands of incubated clients grow and move out of their business incubation environments and achieve sustainable commercial success in their own right.

It all started in the 1990s, when business incubation was nascent and little understood. Her Majesty's (HM) Treasury worked with Midland Bank (now HSBC) on a major research project leading to the publication, in 1997, of ‘Growing Success’ - also the theme of UKBIs 2013 conference. This analysis of business incubation practice in the UK, and overseas, led to the creation of UKBI as the industry's membership organisation, advised by the Enterprise Panel, a committee of experts sponsored by HM Treasury.

Encapsulating Government policy for business incubation in the UK, David Gill, MD of St John's Innovation Centre, Cambridge, and UKBI Board Member, says that it has tended to “map the underlying rationale for public intervention in other commercial areas; namely that active involvement is only justified in cases of market weakness, though government is also a source of information and may seek to stimulate debate.”

Since the 1990s, policy has gone through three stages of engagement reflecting these constraints:

1. In the 1990s, commissioning of the report, Growing Business and launching of UKBI.

2. Between 2000 and 2010, Regional Development Agencies (RDAs) in England, and the devolved administrations, took the lead in supporting further business incubation environments across the UK. Only some 20 business incubation environments were identified in 1997, but a decade later UKBI included a community of over 130 members. In addition, the (then) Department of Trade and Industry designated one of its officials to acquire and disseminate expertise on business incubation, which featured in numerous policy papers and reviews.

3. Following the financial crash and a change of government in 2010, the RDAs were disbanded. Funding was curtailed for both the construction of new centres and the provision of business incubation services. At the policy level, business incubation became more integrated with the support of other initiatives to help firms with high growth-potential.

Given the rapid expansion of business incubation (there are now over 300 ‘business incubation environments’ across the UK), its increasing professionalisation through schemes such as UKBI's Inspire accreditation, and the extent to which UK business incubator managers have been in demand to advise on new projects in the UK and overseas, the government could argue that it no longer needs to be as actively involved in business incubation policy as it was from 1996-2007. However, reflecting industry views, David Gill states, “Good business incubation is similar to research and development in that it generates much wider public and community benefits in terms of economic growth (the ‘ripple effect’), for a client base that goes beyond incubatees/ tenants and externalities that business incubators themselves cannot capture - hence the continuing need for public sector support.”

 And today...

As business incubation environments mature, UKBI has a key role in creating and maintaining the national and international network hub for the exchange and development of learning amongst its many communities of interest, and the spread and maintenance of best practice. UKBI has also developed a range of consultancy services tailored to meet business incubation needs - advising on regional and international economic incubation strategies, benchmarking business incubation delivery, mapping both demand for, and supply of, business incubation and developing practical training and development tools for use across a wide range of business incubation environments.

UKBI operates across a wide range of industry sectors that include universities and higher education establishments, and reflects the rich and varied innovative and entrepreneurial skills base to be found globally. The organisation will continue to keep its members' needs and interests and the quality and impact of business incubation at the centre of everything it does, so that the enterprises of tomorrow will have a fertile, experienced knowledge base available to them.

 A quick look at some of UKBIs members and the innovative ways they have adapted their services is proof of the comprehensive scope of what is on offer…

 In the Net

The NETPark Incubator, located at the North East Technology Park - NETPark, County Durham, UK has over 43,000 sqft of dedicated incubation space and is the kind of place where talent flourishes and businesses have access to a wide range of tailored support and resources. On offer are a mix of flexible laboratory and office space where science and technology businesses can achieve their full potential. The support services include access to the latest news, publications, events, contract opportunities and specialist support to help businesses grow. This personalised, proactive service includes:

• intellectual Property (IP) landscaping services and market intelligence through the NET IP Service

• access to bespoke finance through the NET Funder Service

• a structured programme for technical and product development through the NETPark Net Innovation Academy

• the latest contracts and tender opportunities delivered daily through NET Tender service.

• Virtual Office services and use of meeting rooms at NETPark

These services are complemented by a range of on-site events including monthly networking sessions, expert dropin- clinics, technology debates and market focused conferences, all designed to give your business the opportunity to explore new markets and grow.

Sparking off

Taking an entrepreneurial spark and turning it into a fire requires knowledge, support and advice, all of which can be found in weighty volumes at Sparkhouse, Lincoln University's support centre and home to creative, innovative and technology start-up businesses. More than 230 new businesses have benefited from the award-winning business support centre's expertise that has created more than 370 new jobs and put more than £1m back into the local economy. Adapted from an early 20th century railway building and located within the Enterprise@Lincoln building of the University's main Brayford Pool campus, Sparkhouse was recognised for its ground-breaking design, sustainable features and use of recyclable materials in 2009. It became the city's first BREEAM Excellent-rated building, with a sedum roof and photovoltaic cells producing electricity. The thirty two offices in Sparkhouse benefit from stepped, inclusive rent which cover essentials like telephones, heating and Internet while further commercial office space by the University is available in the Think Tank.

Sparkhouse has more than 30 ‘virtual tenants’ who can use the meeting rooms, Wi-Fi and benefit from the business services available. At any one time, staff in Sparkhouse also support between 20 and 40 students through business mentoring, workshops and informal advice.

Scottish start-up successes

 Scotland is the home of two of the UK's leading incubation/innovation centres in the technology sector. The Hillington Park Innovation Centre (HPIC) near Glasgow, and companies in the Alba Innovation Centre (AIC), Livingston, are busy incubating ideas that will ‘hatch’ into state-of-theart technology innovations under the watchful eye of Innovation Centres Scotland Ltd (ICS). HPIC and AIC are natural entrepreneurial business environments that foster collaborations and sharing among technology companies from early stage entrepreneurs to growing tech companies, all with one common denominator, they are all driven by a belief in an idea that they want to develop and commercialise. ICS's Alba Open Doors, an industry event for the tech industry, is a sure opportunity of identifying key routes to global markets for products. ICS also facilitates introductions to other like-minded young technology entrepreneurs within their centres and provides a range of business support including business planning and financial forecasting, identifying and securing funding routes for the business, securing their IP and developing their business strategy. Additional information about AIC’s and HPIC’s innovative start-ups can be found from page 54 in The Showcase.

In the zone

Formation Zone® (FZ) is a pre-incubator and incubation service created by Plymouth University in 2007. FZ has packaged its expertise, systems and processes into a licence opportunity offered to organisations and businesses that are looking for a proven model of nurturing entrepreneurship, excellent business incubation systems and economic impact, backed up by on-going support and a growing network of alumni businesses. This model of incubation has been replicated by Plymouth University across multiple industry sectors and geographic locations. In 2013 all five of the current Formation Zones have been independently accredited and identified as exemplars of best practice by UKBI. One of Formation Zone's strengths is the investment it makes in nurturing entrepreneurs and pre-start business ideas through a series of tried and tested events and programmes that reduce the barriers to successful start-up. The Formation Zone® brand is specifically designed to appeal to individuals who are at the tentative steps of an initial idea and the FZ brand and pre-start specific events gently lead them into a robust and business-focussed environment.

Plymouth University also operates Cornwall's three multimillion pound innovation centres at Pool, Tremough and Truro, led by Cornwall Council, supported by Cornwall Development Company (CDC), with £29m of investment provided by the ERDF (European Regional Development Fund) Convergence Programme. Between them they are home to 89 businesses employing 390 people, and each innovation centre has a Formation Zone® as the entry point for pre-start and start-up businesses.

Financially sure-footed

The Sussex Innovation Centre (SInC) is frequently cited as an example of best practice within the business incubation industry. The Centre was founded in 1996 as the flagship development of the ‘Sussex Academic Corridor’ (SAC), a unique collaboration between public, academic and business sectors. Now wholly owned by the University of Sussex, the Centre is currently home to over 100 member companies spanning a range of sectors. From an initial public investment of £1.8m, the Centre has supported over 300 start-ups, attracted over £25m in investment, and helped them generate a combined income of more than half a billion pounds. The operation is entirely financially self-sustainable, with income generated by rent, services and support fees. With an in-house support team of 20 business support professionals, the Centre seeks primarily to build the business confidence and ambitions of its members.

This in-house support-oriented strategy is led and championed by Executive Director, Mike Herd. “Our main focus is on customers and markets, with particular attention paid to finding the ‘first customer’,” he says. “Using our member portfolio of new technology, we have built a strong community of industry networking contacts, who can help to identify market opportunities and guide product and service development.” A successful example of this strategy in action: the commercialisation of electric potential sensor (EPS) technology which was developed through academic research, patented and then supported through the university's Research and Enterprise Development Fund. The SInC Team identified a home healthcare market for the technology and today the product is being used in products such as hand-held electrocardiogram devices and gesture recognition technology.

“In special cases, we can offer an intensive programme of accelerated growth support dubbed ‘super-incubation’,” says Herd. “We introduce our senior support staff into a company as interim managers. Putting a team around the entrepreneur can really help to facilitate growth. We can fund this with equity and ‘success fees’, meaning that the financial costs for the start-up are kept to a minimum.” Oban Multilingual SEO, a member company that engaged in the super-incubation programme in 2010, was able to double its revenue in less than a year, which was the target at the outset of the project.

New home in an old space

 In early 2014 Manchester Metropolitan University will relocate Innospace into an old engineering shed which will see it in the same building as university teaching and research in the digital field. By the end of 2013 it is hoped that there will be over a 100 creative entrepreneurs working alongside students and researchers in the centre of a university initiative designed to encourage the interchange with different academic disciplines and the local business community. The hot-desks present tenants with a unique bespoke-office facility allowing for individuals to network with other start-up businesses, as well as providing a desk, M1 postcode, mentoring and links to academic support and external organisations. Prices start from an affordable £50 a month with a 3 months' rent-free offer. Innospace works with a number of partners who provide support from legal, growth and finance advice to Business Startup Boot Camps, mentoring and inspiration events.

Building on Brunel

The Bristol SETsquared Centre has been accelerating hightech, high-growth businesses from within University of Bristol's faculty buildings since 2002. It has supported over 150 businesses, 41 percent of which have not started trading, and those that have, have seen a 100 percent success rate. £125m has been raised in equity, debt and grant funding and the current membership of 61 businesses employ over 650 people and generate over £32m of revenue.

In March 2013, an MoU was signed between Bristol City Council and the University of Bristol to spend £1.7m refurbishing Brunel's original station at Temple Meads, in Bristol's new Enterprise Zone, and Engine Shed was born. In July, the Bristol SETsquared Centre moved in as the primary ‘Component’ of Engine Shed. By the end of 2013, Engine Shed will also house an internet accelerator, a co-working space for creative & digital entrepreneurs, the office of the city-region's inward investment service, the head office of the West of England Local Enterprise Partnership, a public innovation showcase and, to glue all those components together, a membership-only Business Lounge.

Nick Sturge, Centre Director says, “We are using the significant momentum of the established SETsquared business incubator as a magnet for academics, students, corporates, policy makers and innovators to stimulate new business, market the city-region and educate the local population, in particular inspiring young people in the opportunities within science, technology and entrepreneurship.” The incubator itself is significantly enhanced due to the much higher profile, the highlyconnected location, the entrepreneurial and innovation heritage of the building, and the interaction - or ‘oxygen supply’ - created by the other components of Engine Shed. Current projections indicate the impact of the SETsquared Centre will increase by at least 50 percent over the next five years.

The future...

 UKBI believes that with its experience and expertise, backed by the range and strength of its innovative, commerciallyminded partners, its international collaboration and by lobbying for greater public sector involvement, the coming years will see the launch of many more business ideas and the creation of many successful companies. It believes in the positive impact that this industry can bring about on fiscal, social and cultural fronts, and it intends to stay a powerful catalyst for progress and sustainable economic growth on the international stage.