Best Practices 2018: How Business Incubators & Accelerators Should Adapt to Emerging Trends
Business incubation is growing rapidly, as you have witnessed yourself if you’ve read Case Studies 2018 recently published by UBI Global. Once primarily dependent on university or public funding, business incubators and accelerators are becoming more and more attractive to the corporate world.
What is the attraction for big business? Innovative new programs like pre-accelerators, virtual incubation, integrated co-working space and more. In this article, we will explore these new trends so you can apply them to your program.
A great majority of business incubators and accelerators in our Case Studies 2018 report do not focus on one particular sector, they diversify and with good reason. Those that do focus mostly on digital technology, a broad term that encompasses technology trends such as Internet of Things (IoT) and big data.
The following digital trends are particular poised to disrupt major traditional industries
This is an emerging digital trend involving financial technology. Originally applied to back-end consumer and trade financial institutions, the term has recently expanded to include any innovative technology related to the financial sector including education, online banking, investments and crypto-currencies. This sector has some crossover to retail as well as cyber security, another trending sector.
With the goal of improving efficiency and profitability through higher yields and lower cost, Agritech ranges from applications to services and products. Most commonly used in agriculture and horticulture, Agritech can also apply to aquaculture, viticulture and forestry. From weather analysis, pest control, air and soil temperature, Agritech companies also innovate products and services to control irrigation and solar systems as well as use drones.
Education technology was static for quite a few years, but is recently experiencing an upward spike thanks to digital entrepreneurs who have sparked an edtech revolution. These entrepreneurs are using technology to deliver a new architecture of learning. Harnessing the social reach of the internet to deliver personalized education and training that can react to the individual’s learning curve; these technologies rely on big data to be more efficient and effective.
Entrepreneurs involved in planning smart cities use hundreds of different types of sensors to collect data that is used to manage the resources of the city more efficiently. The IoT plays heavily into the smart city grid, optimizing services and connecting to citizens and their needs. Still under quite a bit of interpretation with regard to cultural norms, smart cities are seen as a more structured urban development with lower costs and better living conditions.
Throw what you thought you knew about cyber security out the window; as our social media giants have shown us in the last few months, what we thought was secure really isn’t. Designed to protect the system including the network and data from cyber attacks, cyber security applies to the organization and the individuals who use it. Entrepreneurs in cyber security are on the cutting edge of the techniques used for data protection. All the other trending digital sectors need this one.
These digital trends are directly reflective of what big corporations are investing in themselves. No wonder the business incubators and accelerators in our Case Studies 2018 report had some impressive corporate partnerships to report.
Partners support innovation
When it comes to seeking partner support, one thing all the business incubators and accelerators in our case studies report agreed upon was the importance of their partner universities’ reputation. Each incubator and accelerator has become known as an innovator. They have harnessed their partner university’s brand to create a reputation of trust and confidence for corporate investors.
Building on the learning environment they are so integrated in, the business incubators and accelerators we interviewed for Case Studies 2018 let us in on how they’ve been so successful in raising venture capital. They began with raising venture interest; merging an innovation-hungry company with an exciting entrepreneur with a great product. Getting in on the ground floor before they were even part of the program, the corporation often acted as a mentor in this pre-incubation stage.
Eventually mentorship turned to real capital investment and both the corporation and the entrepreneur were able to realize the benefit of their close relationship. And the program had another boost to its reputation.
Not reputation alone
Corporations don’t invest in entrepreneurs just because of the reputation of the incubation or acceleration program. While reputation can open the door, many things have to fall in place to secure venture capital. The business incubators and accelerators in our Case Studies 2018 report agreed that these five reasons answered the “why invest” question for their corporate partners:
Entrepreneurial mindset – large corporations, over time, become bogged down by process and status quo. They develop portfolios and work to maintain them with steady growth. In today’s world, big corporations know they must innovate and to do that, they have to have a mindset that is different from their day-to-day. A relationship with a good business incubator or accelerator program gives big corporations the connection they need to an entrepreneur spirit.
Re-branding for innovation – rebranding can be a scary concept for a big corporation. After many years of owning one brand, to shift to another can be difficult. Business incubators and accelerators are just the catalyst big corporations need to work with an entrepreneur and consider a new demographic, a new approach or to change course altogether to supply a true need.
Faster solutions, lower risk – business incubators and accelerators in our Case Studies 2018 report were quick to point out one of the top reasons big corporations invest in them. In working with a startup company for a new product or innovation, the big corporation can lower the risk to their own resources in case of failure to market. On the success side, they could bring a new product or service to market faster outside the corporate reality.
Faster expansion – most big corporations, according to the business incubators and accelerators in our Case Studies 2018 report, could never dream to expand another division with a completely new product or service offering as fast as they can by investing with their program in good, vetted startup companies.
Under strain/catalyst for innovation – let’s face it; the public sector and big corporations are under strain. Strain to out-perform and out-think the market. This is getting harder and harder every day. This strain is a driver for innovation and business incubator and accelerator programs are full of entrepreneurs who know the next big thing.
New, innovative sectors and corporate support are driving the need for non-traditional programs for most of the business incubators and accelerators that were part of our Case Studies 2018 report. Some of their successful, non-traditional programs include:
Pre-incubation – before the entrepreneur startup is even in the program, some business incubator and accelerators are giving them early support in order to foster new ideas or develop the ones they have. This pre-incubation gives the entrepreneur a running start to the intensity of working in the program environment. Support typically includes work space, networking and access to investors. Others included financial advice, demo days and special training. No capital or equity stake was on the table.
Virtual incubators – talk about IoT! Virtual incubation programs are seeing a lot of success recently due to cross-market and cross-cultural developments in technology. Among the hundreds of other things you can do online like find a mate, get a degree or advance your career, virtual incubation programs are working in the ultimate off-site arena to deliver services and programs to entrepreneurs via the internet.
Bringing together universities, incubation programs and corporations is our specialty at UBI Global and we’re always looking at the new, trending ideas of our member programs. In the world of business incubators and accelerators, innovative thinking is nothing new; we thrive on it. We believe you can learn valuable information from our publications, especially Case Studies 2018, which is available now.
For more information, please visit: https://ubi-global.lpages.co/cases-studies2018
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