Incubators - Hatching the next creative businesses
- Series: CREATIVE QUARTERS RUHR
Business incubators are under fire in London for being ineffective, unnecessary and propping up failing businesses. Is there a fatal flaw in the publicly-funded incubator model?
A flood of new business incubators opened last year in London, aimed mainly at the tech and digital media sectors. They includes TechHub, a networking centre for tech entrepreneurs, and backed by Google and Pearson, owner of the Financial Times. Innovation Warehouse, backed by the City of London Corporation and a handful of angel investors, is in a historic building above London’s Smithfield market. Entrepreneurs also have access to business angels who may provide finance.
How effective are incubators
Ravensbourne College (pictured) have highlighted their own creative industries incubator in their new, slickly-designed premises on the Greenwich Peninsular. They have about 40 businesses at present, who are given access to the colleges expensive tech and prototyping facilities.
But how effective have incubators been? In Wales, the major incubator network, Technium, has just been disbanded after some damning research into its lack of success.
The incubator concept was too often used to try to prop up failing local economies, rather than in areas where there is demand for their services.
The public sector has a diffrent role
Public agencies establishing incubators often look to international models like Vienna’s i5invest and California’s notoriously successful Plug’n’Play. But these are hard-nosed, business focused operators who pick the most promising ideas and take risks on it. Clearly, the public sector has a different role and this can often conflict. These incubators often need to be cut-throat to succeed, and this can be difficult for public bodies to agree to.
Successful incubators, like Ravensbourne’s, recognise this by making businesses agree on strict criteria to get into the incubator - and also strict criteria to help them leave, either because they’re failing and stagnating, or growing and succeeding.
And as the Financial Times has noted, these incubators have had some major successes. The UK’s largest software company, Autonomy, started life at the UK’s oldest incubator, the St John’s Innovation Centre in Cambridge.
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