We have started with a noble goal which was to create a timeline and present a holistic view on the industry’s development. However, it turned out that the selection and identification of the most significant events is extremely subjective. Which events we should consider and which not? Why this was important and not that? How you can identify and trace influence of a particular event that happened decades ago? So, this was really challengeable task.
That is why we decided to publish first draft and then update it according to the feedback from experts community. Thus, our team will appreciate any help from industry expert on what could be changed or added to it.
It’s also very hard to trace precursors of the phenomenon. As I’ve mentioned in the previous post (The History of Business Incubation – Part 2) according to Mr. Chinsomboon any controlled environment that helped businesses to grow could be considered as business incubation environment. We can found a lot of different examples before Batavia Industrial Center of systematic help for new businesses. However, the date of formalization where main components of basic business incubator model were linked together is 1959. Therefore, we agreed to have Batavia Industrial Center Launch as our starting point.
So, please enjoy the results of our work and we will appreciate any help and feedback from experts and community!
March 2013
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Business Incubation Timeline (2013)
1. Business Incubation Timeline
Business Incubation Blog http://worldbusinessincubation.wordpress.com/, Author Ryzhonkov Vasily
Business incubation programs diffused Batavia Industrial Center was established in
slowly across the USA the USA
1959
1960s
University City Science Centre
Business Incubation programs diffused slowly across the A local real estate developer Mancusos acquired an 850,000 ft building
country, they were mainly government-sponsored being a left vacant after a large corporation exited the area. Massey-Ferguson
(UCSC) in Philadelphia was opened
response to the need for economic restructuring. Notably, in Concept of business incubation
plant was closed as a result of mergers and consolidations in the farm
the 1960s interest in incubators-incubation was piqued by the expanded in the US when a 28-
equipment industry putting almost 2 000 local residents out of work.
development of University City Science Center (UCSC), a member consortium of colleges,
Unable to find a tenant capable of leasing the entire facility, the
collaborative effort at rational-izing the process of universities and academic health
developer opted to sublet subdivided partitions of the building to a
commercializing basic research outputs. centres opened the University City
variety of tenants, some of whom requested business advice and/or
Science Centre in Philadelphia,
assistance with raising capital. Thus, the first business incubator was born.
Pennsylvania. As part of its efforts, the
National Science Foundation These efforts launched a number of new local ventures, and formalised
University City Science Centre
the concept of business incubation as an economic development tool.
catalyzed best practices of business 1964 initiated a programme to support the
establishment and growth of early-
incubation and the concept 1970 stage companies in the research parks
In the 1970s interest in the facility, thus establishing one of the
incubator-incubation concept was s Business incubation reached England first US urban research parks and
further catalyzed through the incubators.
operation of the National Science
Foundation’s Innovation Centers Next wave of BI because of plants Loren Schultz started
Pro-gram, an effort to stimulate closures in steel industry Technology Enterprise Center
and institutionalize best practices Next wave of incubator
in the processes of evaluating and development in the United in Philadelphia
commercializing selected Kingdom was in response to plant
technological inventions. closings, British Steel Corporation 1972
established a wholly owned
subsidiary. Following British Steel's Leaders started consider it as a viable approach for
example, a number of other stimulating, diversifying or even stabilizing local
private corporations,5 as well as economies. Evidence exists that business incubators were
local, national, and regional 1975 beginning to take hold in England from as early as 1972 the
governments, universities, and subdivision of older vacant buildings by architects into
12 Business Incubators were community organizations have "working communities" of design-related firms with shared
operating in the United States sponsored business incubators in accommodations, services, and management (the first was in
the United Kingdom and Western 1972 in London designed by David Rock at 5 Dryden Street,
All of them in the industrial Northeast, which Europe Covent Garden Loren Schultz has started first
had been hard-hit by plant closures in the
previous decade 1976 Technology Enterprise Center in 1976 in
a suburb of Philadelphia. Main aim was
to house companies involved with
1980 technology-related businesses and new
technology-based products. Later over a
dozen center programs were launched.
1980s
City Venture Corporation (CVC) developed
business incubators in several large and
small cities Business Incubation spread in the The rate of incubator diffusion
Control Data Corporation, under the UK and Europe through various
direction of company founder William increased significantly
Norris, became one of the earliest related forms
supporters of the business incubation
industry. With a belief that large
First National Study of companies should work with government
and other sectors to address major societal
Business Incubators needs, Norris formed City Venture
first national study of business incubators in Corporation (CVC), a Control Data division
1984, Business Incubator Profiles*—which that developed business incubators in
reported that over half were less than a Incubation spread to the UK and Europe through various The rate of incubator diffusion increased significantly when
several large and small cities. Several related forms (e.g. innovation centres, pépinières
year old—the number of incubators in successful incubators that were initially "(a) the passage of the Bayh-Dole Act in the U.S. Congress in
d’entreprises, technopoles/science parks).
operation has increased by one-third to developed with assistance from CVC – 1980 decreased the uncertainty associated with
one-half each year including the Entrepreneurial Center in commercializing the fruits of federally funded basic research,
1982 (b) the U.S. legal system increas-ingly recognized the
Birmingham, Ala., and the Pueblo Business
& Technology Center in Pueblo, Colo. – importance of innovation and intellectual property rights
still exist today. Walter Plosila’s design for the state’s protection, and
(c) profit opportunities derived from the commercia-lization
Ben Franklin Partnership Program of biomedical research expanded." In this environment several
1984 incubator development guides as well as non-academic
reports and articles with a geographic and normative focus on
current or potential business incubation efforts were
generated.
Walter Plosila’s design for the state’s
European Business & Innovation Centre Ben Franklin Partnership Program,
Network (EBN) officially established by the one of the country’s first The U.S. Small Business
comprehensive technology and
manufacturing agendas. Program Administration (SBA) strongly
EC included incubators as a key component, promoted incubator
became an early model for other states’
support of business incubation. development
Series of regional conferences to disseminate
First Academic Studies of Business 1984 - information about incubation. The SBA also
published a newsletter and several incubator
Incubators 1987 handbooks during the period resulted in 20
incubator openings annually in 1984 to more
than 70 in 1987.
mid-1980s
1st EC-Business Innovation Centre (B.I.C.) opened in Liège,
Belgium National Business Incubation
European Business & Innovation Centre Network (EBN) officially
Since the establishment of the first business incubator,
Association (NBIA) established in the US
established by the EC and industry leaders such as British Steel
most incubators have been established as publicly
(industry), Cockerill-Sambre, Natwest, IRI Group, Générale de
funded vehicles for job creation, urban economic
1985
Belgique, Fiat, Control Data Corp., EVCA, Philips, Barclays etc.
The first chairman of EBN was Viscount Etienne Davignon, while revitalization, and the commercialization of university
innovations, or as privately funded organizations for the
Romano Prodi, Lord Carr and Alain Minc were other influential
incubation of high-potential new ventures . Main topics The Torch Program was
Board members.
considered definitions, taxonomies, policy implemented by the Ministry
prescriptions. Main questions were "What is an
incubator?" , "How do we develop an incubator?", of Science and Technology
Business incubation leaders formed the National Business
"What life cycle model can be extracted from analysis
Incubation Association (NBIA). This surge in report-
of business incubators?"
First Chineese business generating activity in the early 1980s and the formation of
the NBIA in 1985 underscore the growth in popular interest
incubator was set up in Wuhan 1987 in business incubation in the 1980s. It was established
aiming to provide training and tools for assisting start-up The Torch's Program mission was to
First Chineese business incubator was set up in and fledgling firms and to serve as a clearinghouse for accelerate national technology
Wuhan information on incubator management and development development, commercialization and
Academia: Incubator configuration issues 40 members in its first year to approximately 1600 in internationalization.
2006. The main objective of the Torch Program
studies and Incubatee development 1988 was to create a favorable environment for
studies high-technology industries in terms of
Academia enhanced research of business incubator topic. policies, financing, information networks,
Main topics at this point of time are conceptual frameworks and strategic development the growth of
and incubatee selection. Phase 1 of China's BIs development was carried business incubators in China occurred on
Main questions: a national scale, fueled primarily by
out financial support from the Torch Center
1) What are the critical success factors fro incubation?
2) How does the incubator-incubation concept work in
practice?
3) How do incubators select incubatees?
1987 - 1990 Researchers investigated
4) What is the process of new venture development in an
incubator context? business incubation impact
5) What is the role of planning and the business incubator Researches were concerned about following
manager? topics:
1) Levels and units of analysis
The government of China instituted special policies in support of business
2) Outcomes and measures of success
incubator development and took responsibility for the provision of basic
Main questions:
physical infrastructure and services.
1) Do incubators achieve what their stakeholders
This approach was essentially a landlord model of incubation where the
assert they do?
Idealab! was founded by government provided physical resources, such as land and buildings, along
2) How can business incubation program
1987 - 1997 with access to governmental sources of risk capital with little or no
Bill Gross emphasis on value-added services, such as business consulting or
outcomes be evaluated?
Idealab was founded by Bill Gross with a 3) Have business incubators impacted new
handful of employees to test many ideas at networking
venture survival rates, job creation
once and turn the best of them into Incubators during this early phase were almost fully sponsored and
rates, industrial innovation rates?
companies, while also attracting the human supported by government funds and run on a non-profit model in
4) What are the economic and fiscal impacts of
and financial capital necessary to bring accordance with the Torch Center’s first goal of commercialization of
an incubator?
them to market. technology.
1990 – 1999
1996
Dot-com bubble shifted attitude and media
considered incubators as producers of
Pronounced shift
"Death Stars".
towards for-profit
incubators late 1990s
During the .com mania there was a
pronounced shift towards for-profit
incubators
it is estimated that in the USA, a for- August 1999 and
profit internet incubator was being
created every other day. Aberdeen August 2000
Group analyst Dave Wright estimates
that the number of for-profit
incubators rose from just 37 in January In the late 1990s, fueled by irrationally exuberant stock valuations of
1998 to more than 400 by July 2000 3200 business several for-profit incubators and/or their incubatees, the media
popularized a fantasy of business incubators as innovation hatcheries
incubators in the capable of incubating and taking public ‘‘infinitely scaleable, dot-com
World
3200 business incubators in the
e-business start-ups’’ less than a year after entering the incubator. This
fantasy and the incubator-incubation concept were largely
World: abandoned and left for dead by the popular press after the collapse of
Major Business Accelerators - one-third is located in North 2000 the United States’ stock market bubble.
America; 900 incubation programs in
were estabished However, rumors of the demise of the incubator-incubation concept
- 30% in Western Europe and are ‘‘greatly exaggerated’’. The media reached its negative Western Europe
- the rest is dispersed over the Far conclusions regarding incubators-incubation while fixated on for-
East (20%), South America (7%), profit incubators, a relatively small segment of
Eastern Europe (5%) and Africa, the total incubator population.
the Middle East and other regions The vast majority of incubators are non-profit entities that continue to
(5%) (EuropeanCommission, 2002). incubate below the ‘‘radar screens’’ of most journalists.
2002
Major Business Accelerators were 2005 - 2011 A study funded by the European Commission in 2002
established such as Y Combinator by Paul identified around 900 incubation environments in Western
Graham, TechStars by David Cohen, Brad Y Combinator was started by Paul Europe
Feld, David Brown, and Jared Polis,
500startups by Dave McClure, DreamIt TechStars was launched Graham
Ventures, etc.. TechStars was launched as a mentorship-driven
startup accelerator. It was founded by David 2005
Cohen, Brad Feld, David Brown, and Jared Polis.
Business accelerator developed as a 13 week MENAinc and AIN were
programs for startups in Boulder, New York City,
Boston, Seattle, and San Antonio. Out of the 114 launched in Africa
MENAinc is a regional network of business
Phase 2 of China's BIs development companies that have completed the TechStars
incubators and technology parks as well as their
program, 92% are active and profitable.
was launched supporting organizations and stakeholders for
Development of more specialized, industry-specific 2006 Middle East and North Africa (MENA).
incubators that targeted specific sectors in high In March 2005, one of the top seed accelerators in MENAinc is part of the global network of
technology, such as new materials, software, the US (Y combinator) started it's activity. Y infoDev.
environmental technologies, combinator provided small amount of seed African Incubation Network (AIN) included
Pre- and post-incubation services were also pro-vided by investment and hosted startups in it's 3 months- groups that planned and opened incubators
some of the more progressive incubators. Local, regional program. Main services are networking, advice on with infoDev support.
and national incubator networks were developed in this business from experienced entrepreneurs.
period with the intent of sharing resources and knowledge In 2013, the average valuation of Y Combinator-
and continue to grow to this day backed companies, according to co-founder Paul
diversified funding sources, i.e. mix of government, Graham, is $45.2 million. As of 2013, Y Combinator
private and university/research institutes, indigenized has funded over 500 companies in over 30 different
incubators markets.
Profit-oriented models of incubation were created in
China, particularly in the South such as Shenzhen and 2007 5000 business incubators in the
Guangzhou where the environment is more market- 1997 - present World
oriented.
5000 business incubators existed in the World
in 2007 :
North America - 1000
9000 business incubators in the World Western Europe - 900
9000 business South America - 400+
incubators exists in the Asia - 1000, China - 540
World in 2007 : Business Incubation industry maturity Mid East, Africa, Australia – no information
North America - 1400
USA - 1250 The industry has matured the types of businesses
Western Europe – 1000 incubated has significantly broadened.
Germany – 200+ Incubation is a highly adaptable business
intervention form, and today’s incubators target
UK – 300 2013 diverse industries such as biotechnology, clean
Eastern Europe - 300
South America - 400+ energy, ceramics technologies, the internet,
Asia – 1000 software and telecommunications, high
Africa – 50+ technology, and the arts. The industry services
Mid East – 50+ high-growth, venture-backed businesses as well
Australia & Pacific Area as micro enterprises; women and minority
– no info owned businesses; and rural, suburban and
urban environments
Business Incubation Timeline
Business Incubation Blog http://worldbusinessincubation.wordpress.com/, Author Ryzhonkov Vasily