«Published Annually Vol. 6, No. 1 ISBN 978-0-979-7593-3-8 CONFERENCE PROCEEDINGS Sawyer School of Business, Suffolk University, Boston, Massachusetts ...»
6. Green Textile Movement data base Conference papers © Knowledge Globalization Institute, Pune, India, 2012 Conceptualizing a Network Model of Co-incubation Using Business Architecture and Business Intelligence
The initiation incubation system some decades ago was established to support the start-ups during their initial phase of development. In the current era of information technology and social media, only incubation at one place does not satisfy the needs of the start-ups, especially in emerging economies like India and China. There have been numerous strategies and programs to encourage and support start-ups for business development and improve their prospects for long-term success.
The conceptual modeling for working of more than two incubation systems together might bring about the business architecture of co-incubation system. This is necessary for the development of resource constrained countries for economic growth and prosperity. It is required that the existing incubation systems should use business intelligence for sharing resources, knowledge capital and other services. The current business practices of effective business incubators have however, generated positive results for start-ups by bringing industry and academia together. Business intelligence is already being applied as technology tool in large companies. The conceptualization of this intelligence to satisfy the immediate needs of start-ups by mutual sharing between incubation systems might bring a copetitive model for co-existence. A network model architecture for the mutual sharing and functioning of the incubators must be developed for bringing this essence of business intelligence. This paper conceptualizes the business architecture of co-incubation network using business intelligence. This conceptualization has occurred by finding the role of an incubator and how they can work together to excel. Illustrations from existing practices of incubation system in India have been used. Hence, the paper puts forth a vital architecture which might be used for the development of a network to suite to resource constrained countries.
A business incubator is a physical entity providing small businesses with space, support services, and networks to entrepreneurs, investors, and clients. The term ‘incubator’ was derived from the fundamental meaning of the term: the artificial nurturing of a chicken egg in order to hatch them faster in a sheltered environment. The same hatching concept is applied to the incubating of companies; it speeds up new ventures’ establishment and increases their chances of success (Hansen et al., 2000). An incubator thus hatches new ideas by providing new ventures with physical and intangible resources (Allen and Bazan, 1990). Public university incubators can have a positive effect on incubated firms (Stemberg, 1990;Felsenstein, 1994; Mian, 1996; Scott, 2000). They increase the survival rate of new ventures by reducing the entrepreneurs’ resource constraints in their pursuit of opportunities (Mian, 1997; Stevenson and Jarillo, 1990; Timmons, 1999).
Incubators can also accelerate the time-to-market and likelihood of success (Allen and McCluskey, 1990).
The National Business Incubation Association (NBIA) as per developed nations concept define an incubator as “a business assistance program targeted to startup and early stage firms with the goal of improving their chances to grow into healthy, sustainable companies” (Adkins, 2001). The start-ups need to achieve wealth creation, economic development strategy, job creation for people and solving problems with innovative approaches. Higher Education Institutions in India like Indian Institute of Technology (IITs) and Indian Institute of Managements (IIMs) are valuable contributors to incubation which provide the right foundational elements, sufficient funding structure, physical space, legal support, administrative and managerial support, mentoring and consultancy. University incubators can revitalize an economy and support regional economic development and job creation; they are often part of economic policy alternatives for regional development (Crampton and Evans, 1993; Davelaar and Nijkamp, 1988; Plosila and Allen, 1988; Birch, 1987).
Hence, the objective of the paper is to conceptualize the business co-incubation network from existing illustrations. The paper draws its resources from the incubation model of Indian Institute of Technology, Kharagpur.
Incubation is an important instrument for start-up businesses/entrepreneurs. Start-ups emerging from university incubation system rely mostly on the incubators within the university. Unlike the developed nations, incubators in resource constrained economies, lack many facilities and are not at par with the services. However, a well calculated architecture for sharing the resources mutually might help to develop the network. There is a need for intelligent identification of resources which are critical for the development of start-ups.
The following figure (1) depicts the resources an ideal incubation might have. The incubation resource pool might be able to find the need of a particular network support to facilitate the start-ups.
The relevance of business intelligence in co-incubation is realized by understanding that the start-ups in the incubation system co-exist rather, compete with other. All the incubation system might not have the resources available as depicted in the above figure. By the virtue of being incubation system, the start-ups can utilize the resources by default. However, they might not be able to connect with the other systems.
The startup business/entrepreneurs face greater challenges than the average business owners, including lack of access to capital, lower education levels, and less focus on commercial efforts in emerging economies context. In consonance with the challenges, business incubators provide support to avoid these challenges. Hence, we propose a business intelligence supported business architecture for co-incubation.
Conference papers © Knowledge Globalization Institute, Pune, India, 2012
The definition of ‘business intelligence’ might vary from person to person (Chase, 2001), but from the perspective of business incubation we might call it the acquisition, utilization and sharing of vital resources between the business incubators, to support the business start-ups in the incubation system. The management of knowledge and data flow between start-ups can be used to create the definition of business intelligence for co-incubation. The start-ups in the incubation system are novice and require a number of supports from the incubation as well as the setting where they exist.
In general, “business” in its open logic can be defined as a structured collection of individuals for which intelligence is important to the shared as well as individual success of the group (Chase, 2001). ‘Intelligence’ refers to things, properties or activities.
The varied definitions provide the opportunity for flexibility in the meaning of the word. The word ‘business intelligence’ provides a narrow definition in existing literature where it refers to some kind of tool or technology being used in decision making. However, keeping in consideration the incubation definition in this research paper, we are more interested in defining business intelligence as an intelligence to share co-exist as business start-ups within the incubation systems.
The advent of technology has created a bridge for the information systems which was not present some decades ago. This communication system has created an integrated collaboration for the intelligence to solve resource constraints of the start-up companies. The start-up companies by the virtue of their upcoming technology/services try to survive through small grants or partnership fund. However, if business intelligence is applied within the co-incubation network to provide them the shortage resources without creating a deadlock situation, these start-ups might become successful without much struggle and long duration.
Knowledge resource can not be replaced by technology tools for computer storage and retrieval (Brackett, 1999). The process of co-incubation can not be automated with technology but can be facilitated by knowledge work force. Moreover, business tool can only assist but not automate the refinement of facts from knowledge. The monitoring system of incubations should identify where the start-ups lack in their growth process. This monitoring may take place with the help of experts from technology and management from different places. This decision support is the heart of the business intelligence which helps start-ups get at, share and understand the need of vital resources. However, decision support and knowledge management would make business intelligence solve the issue for developing a chain of intelligence to understand the deficits in start-ups.
The below figure (2) show the BI resource chain between the different services of incubators which might be vital for coincubation. Hence the chain of business intelligence finds out what is required by a particular start-up in terms of the above resource pool. Unlike the incubation in private systems, when start-up is in the incubation system of higher educational institution, they might have access to almost all resources. It might also be said that they are in better position than other lower level incubators. Hence it is required that these lower level incubators take opportunity to support their start-ups through coexistence.
Conference papers © Knowledge Globalization Institute, Pune, India, 2012 Figure2: Business Intelligence Chain for Resource Sharing from Different Incubation Resources pool The above figure has the BI chain which is used to find out the needs of a particular start-up in the incubator. This chain can be formed as part of the co-existence of different incubators. The purpose of chain will be to identify and allocate available resources to willing start-ups from different incubators. In return the sharing incubator might also demand certain advantages from the earlier incubator. Hence we need to look into the system of co-incubation which might originate and work providing them a proper architecture.
Literature on incubation has concentrated on different types of incubation and their possible effects on the business environment. Previous research provided differing classifications of incubators, depending on the author and his perspective (Baker et. al., 2006). Publications mention business and technology incubators, university technology business incubators, high technology incubators, networked and virtual incubators, to name only a few of the different expressions used. For example, max von Zedtwitz (2002) distinguishes between regional business incubators, university incubators, independent commercial incubators, company-internal incubators and virtual incubators. Even studies of incubators in the same country reflect differing connotations and perspectives. For example, Colombo and Delmastro (2002) focuses on new-technology-based firms receiving incubation services in Italian science parks and business incubators. A non-profit incubators nurture a social purpose, such as supporting community development as part of an overall economic policy, often supported by government
subsidies (Nielsen et al., 1985). Literature suggests that the basic variables for an incubator to support a startup venture are:
develop, share, and maintain strategic plans, understanding of consumer needs, competition, skill occupied, solve a local Conference papers © Knowledge Globalization Institute, Pune, India, 2012 problem with an innovative solution, legally protect novel ideas, scrutinize ideas and approach, innovative product, identify new opportunities and materials.
The incubation systems provide a supportive environment, where new entrepreneurs receive training in business management skills and networked marketing, vision, planning for sustainability, buffered from stiff market forces with below-market rent, reduced fees for services, and greater access to seed capital (Gatewood et al. 1985; Peterson et al. 1985;
The broader concept of “Co-incubation” seeks a collaborative approach to generate startup business success. In coincubation concept, two or more incubators can fund the same companies or two different tenant companies with complementary assets; cooperate in order to become more competitive. It requires an integrated economic development strategy for social wealth creation. Co-incubation fosters an enabling environment to increase opportunity for startup businesses. This requires a community-wide effort involving businesses, support organizations, educational and research institutions, government support, and financial institutions in building infrastructure, culture, education, policies, and access to funds to increase startup business growth and success. A good infrastructure will support entrepreneurs operation or sell competitively. Easy access to capital, trained workforce, experienced managers, government and political support to minimize barriers will strengthen start-up activity and growth of business. Co-incubation reduces risk of startup failure, increases longevity, and fuels growth. Co-incubation to startup venture supporting enterprise growth, increasing living wage employment, and fueling the local economy directly and indirectly. This includes keeping business activities local, such as hiring, procurement.
Incubation systems for start-up companies became a popular economic development approach in India as a result of the confluence of a number of factors including economic restructuring, theory of innovation evolution, rise of “technopolis,” and new insights regarding the role of small businesses and entrepreneurialism (Lewis, 2001). Even after these efforts, vast majority of new enterprises failed as a result of three common problems: lack of capital, poor managerial skills, and insufficient understanding of the marketplace. This was the starting point for the growth of business co-incubators. The spirit of this strategy was that local innovation and new firm formation will result in endogenous growth (Eisinger 1988; Massey et al. 1992;