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SCOPE OF INCUBATOR CENTERS

The definitions of business incubation vary markedly from country to country and
information flows are sporadic. Therefore, the numbers of incubators worldwide are
estimates and are provisional. As of October 2006, there were nearly 7000
incubators of various types in the world.1 Out of these, approximately 1400 were in
North America (1115 in United States, 191 in Mexico and 120 in Canada), 1000 in
Europe (including 370 in Germany), 400 in China, 355 in Korea, 265 in Japan, and
220 in UK. The remaining are in other parts of the world. India has around 120
incubators including 40 Science and Technology Entrepreneurs Parks (STEP).
Business incubators originated in the United States of America and the first
incubator came into being in an abandoned Massey Ferguson manufacturing plant
in Batavia in 1959. A number of initiatives were undertaken between 1985 and 1995
to strengthen the incubation movement and as a result, it evolved into an
ecosystem with a plethora of models ranging from public to private incubators.
Business incubation took a growing role in Canadas economic development. During
the year 2005, there were more than 83 operating business incubators generating
funds in excess of $45 million. Within them, 900 client businesses raised revenues
over $93 million and created full and part-time employment for more than 13,000
people.
China also has a well-developed incubation market space, with the government
playing a predominant role to accord with its mandate of high technology led
economic growth. Although the creation of small businesses through the incubation
model started only in late 1980s, it has been able to develop about 400 variants in a
short span. These incubators have helped bridge the gap between research and the
marketplace, fostered entrepreneurial attitudes, and facilitated the re-entry of
scholars abroad. Between 2002 and 2006, the number of client firms increased from
20993 to 71 41434, and their real value added increased from 41 billion to 133
billion Yuan (at the 2000 price).
National Business Incubation Association (NBIA) estimated that in 2005 alone, North
American incubators assisted more than 27,000 start-up companies that provided
fulltime employment to over 100,000 workers and generated annual revenue of $17
billion. Another study in the mid 1990s found that 87 per cent of all firms that had
graduated from NBIA member incubation programs were still in business and about
84 per cent of them remained in the incubators community.
A 2008 study conducted by consulting firm Grant Thornton for the US Department
of Commerce Economic Development Administration found that business incubators
produced new jobs at low cost to the government.

Over the last 12 years, United Kingdom Business Incubation (UKBI)7 has measured
the impact of incubators on local economy and workforce. The research proved that
an incubator's client firms provided an average of 167 jobs (full time equivalents)
per incubator and were home to roughly 30 entrepreneurial companies at any one
time. About 60 per cent of them also operated "outreach" services and were able to
support 150 additional ventures. Most importantly, businesses had an average
success rate of 98 per cent when they were located in the incubator as compared to
a national average of less than 30 per cent and around 87 per cent of them survived
beyond five years. Thus, business incubation centres have not only grown in
numbers and geographic spread, but also in terms of its impact on promoting
entrepreneurship, job creation and economic development across the world. So far
as the Indian scenario is concerned, the National Science and Technology
Entrepreneurship Development Board (NSTEDB) launched the Science and
Technology Entrepreneurs Parks (STEP) in the early 1980s, and the Technology
Business Incubators (TBI) in the beginning of 2000.
Our country has nearly 120 incubators and science parks which have nurtured over
1150 entrepreneurs up to 2008.
NSTEDB has so far created 53 TBIs in collaboration with premier academic and
research institutes with an investment of Rs. 100 crores and the cumulative revenue
generated by these incubated enterprises now stands at Rs. 595 crores.
72 Although no comprehensive study has been carried out to measure the impact
of these mechanisms put together, the estimates are that all these incubators help
to graduate about 500 enterprises every year and out of these, 60 per cent are
technology based startups.
The report of the Working Group on science and technology for small and medium
scale enterprises for the Eleventh Five Year Plan (2007-2012)12 recommends that a
total of 170 Technology Business Incubators and 50 Technology Innovation Centres
should be set up with a total outlay of Rs. 1100 Crore. Though the origin of
Incubation Centres in India is recent, they have played a significant role in
promoting entrepreneurship which could be reviewed from the unique contribution
of few Business Incubation Centres. Founded in 2000, SIDBI Innovation & Incubation
Centre (SIIC), set up by Indian Institute of Technology, Kanpur has incubated 15
startups, of which 5 have already graduated. SIIC incubates ventures in technology,
engineering and all interdisciplinary areas. The incubatee firms have created
employment for 94 individuals and generated revenues exceeding Rs 67 million.
Centre for Innovation, Incubation and Entrepreneurship (CIIE), Ahmedabad which
came into being in 2001 facilitates the conversion of hi-tech and mass-impact
innovations into enterprises. From amongst the 16 companies that have been
incubated, 2 have already moved out successfully. CIIEs incubatees currently
employ over 150 individuals across western India. Technology Business Incubator,

National Institute of Technology, Calicut, (TBINITC) was established in 2003 and has
completed incubation of 4 out of the 17 ventures that have been admitted so far.

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