Sweden Case Study 2002

Benchmarking of Business Incubators

Incubator: Mjärdevi Science Park and Incubator 1.

Background and Regional Context

There are some 35 science parks/incubators in Sweden. The Mjärdevi Science Park is located just outside Linköping, which has a population of 135,000 and is Sweden’s fifth largest city. The city has a cluster of high tech industries – SAAB Aerospace maintains both their headquarters and manufacturing of fighter aircraft there and both Nokia and Ericsson have major operations in the area. The science park was established in 1984 to provide a location for high tech companies close to Linköping University (in particular, the Institute of Technology and the University Business School and Medical School). The incubator was set up at the same time to encourage spin-offs from the university and corporate R&D. 2.

Incubator Operations

Mjärdevi Business Incubator AB, which today occupies 1200 m² in a building located centrally on the Mjärdevi Science Park, consists of 30 offices ranging from starter units of 10 m² to ‘growth’ units of 50 m² The incubator is staffed by 2 persons and receives additional support from the science park staff, which has four full-time employees. The incubator is owned by University Holding of Linköping, Mjärdevi Science Park AB, and Teknikbrostiftelsen (Technology Bridge Foundation). Companies or development projects applying for entrance into the incubator scheme undergo an evaluation to determine their placement, appropriate fees, requisite review dates, and incubator exit strategy. To obtain premises at the ‘Starthus level, individuals have to have either enrolled on or completed the University’s Entrepreneurial Development Programme (ENP). In the ‘Starthus’ they receive a range of business support services (accountancy, marketing, legal advice, etc) from professional firms located in the Linköping area. The incubator has negotiated arrangements under which a certain amount of professional advice is provided free of charge. Assuming the start-up is successful, it then moves after one year into the ‘Växthus level’ where it can remain for a further two years. Here, support is provided within the framework of the ‘Growlink’ scheme. Rental charges are graduated over an average period of three years. Almost half the tenant companies are spin-offs from the university. The remainders are companies that entered the ‘Växthus’ without going through the ‘Starthus’ incubation programme. The main activities are telecom, software, electronics and home communications as well as those life science activities emerging from converging technologies. To date, some 200 university and incubator companies have been assisted by the incubator network leading to the creation of an estimated 2,000 jobs locally and

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Benchmarking of Business Incubators

well over 10,000 jobs globally. Most of the graduate companies have moved to larger premises elsewhere in the science park. This currently occupies nearly 200,000 m² and has 160 firms employing some 5,000 people. Further expansion is planned, partly in order to help promote spin-offs from Saab, Ericsson and other major firms. 3.

Good Practice Examples

There are several aspects of the incubator’s operations that demonstrate good practice: The Centre for Innovation and Entrepreneurship (CIE) within Linköping University offers courses in entrepreneurship and new business development at both undergraduate and postgraduate level in English and Swedish. Entrepreneurship Development Programme (ENP): This course is conducted by CIE in collaboration with SMIL (Business Development in Linköping) and other local actors. These courses, which began in 1994, consist of eight modules and leads to the creation of new companies and the award of a formal ‘certificate’ level qualification. To enter the course, the individual has to have a good business idea. Many entrants come from the University’s Business School, the others coming from small businesses in the Linköping area. Each course usually has 10-20 participants. There is a close link between the ENP and the University’s research activities, on the one hand, and the CIE’s wider role in providing business support services to local firms, on the other. The ENP is regarded as a model in Sweden and has been replicated elsewhere. Business Development Programme This programme was created in 1986 to develop the businessperson’s skills in the companies, which have been on the market for about two years. Every programme consists of up to 9 companies represented by 2-3 persons bringing their own questions to every meeting. About 100 firms have participated thus far. This program serves the incubator program indirectly in two important ways. First it is available as a later stage development opportunity for companies that have been incubated here and second it provides an opportunity for CIE to introduce mentors from these emerging companies to the new starts. ‘Growlink’ Scheme: This scheme is managed by University Holding, the technology transfer arm of Linköping University. It consists of a structured framework of business support designed to speed up the development of tenant companies. The scheme begins at the pre-incubation stage, i.e. Entrepreneurship Development Programme, and at this stage includes an ‘Ideas Advisory Board’. At subsequent stages in the scheme, key elements include access to a wide network of contacts (University, business support organisations, companies, etc) in the Linköping area and access to financial assistance from the Technology Bridge Foundation which is the off-shoot of a national scheme providing grants for high tech start-ups. The Growlink scheme is noteworthy because it ensures

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linkages into a wider network of business support organisations and provides a structured framework for developing start-up firms. An interesting aspect of the scheme is that there are three ‘Process Leaders’ who ensure that the various ‘Growlink’ inputs are coordinated in a proactive manner. Idea Lab: Within the incubator is a space dedicated to idea formulation and innovation. Here, students, faculty, business advisers, and companies may come together to brainstorm. Within the lab is a new specially designed space-in-the-round that offers 8 comfortable chairs, plenty of wall surface on which to write, as well as light and sound controls to provide users with customisable atmospheres in which to innovate. Incubator/Expert Breakfast: This initiative brings together area experts in law, patent and licensing procedures, bookkeeping, accounting, marketing, public relations, among others to meet every last Friday morning of each month with incubator tenants for an hour and a half casual breakfast. All of the experts attend as do the tenants thereby all learning from one another. They hear a brief presentation for ten minutes and then discuss issues surrounding the presentation or other pressing issues on their minds. The experts also deliver pro bono service to tenants on a pre-arranged basis through the incubator management at Mjärdevi Science Park. Incubator Fund: Teknikbrostiftelsen (The Technology Bridge Foundation) manages a dedicated incubator fund to assist qualified new incubator companies with necessary capital for development. Internationalisation: Recognising that many new start companies in the world must often find large markets for their innovations, products, and services, the Mjärdevi Science Park Incubator offers companies information on other markets, access to overseas capital, patent search, access to tax and regulatory experts, and partnering opportunities. Mjärdevi takes advantage of the global science park and incubator network as well as its contacts in various countries’ investment agencies, universities, and corporations to help serve the tenants in the best way possible. The incubator also serves as a starting point for appropriate technology-related companies from abroad seeking to establish themselves in Sweden. Trade Shows: Wherever possible, Mjärdevi Science Park leverages the resources of its tenant companies in order to allow cost-effective participation in conferences and trade shows such as CeBit, Comdex, BIO-Scandinavia, and others. Media Relations: Through affiliations with local media relations experts and through special arrangements with PR Newswire Europe, Mjärdevi Science Park is able to promote its companies often and to help companies learn to work with the media as well. HomeCom Initiative: This is a joint marketing initiative managed by the incubator/science park to describe the region’s competencies in the converging IT,

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telecom, wireless, and electronics technologies affecting the home: security, entertainment, electrical and water systems, heating, telemedicine, and more. This is home communications. The initiative has so far led to the publication of a book on home communications designed to explain and publicise the concept, a university-backed department dedicated to home communication research, and an idea think tank. Ericsson, Nokia, and a network of other technology companies, researchers, designers, and building developers are developing a home com show room, smart homes and apartments. Backed by both Ericsson and Nokia this is a good example of a precompetitive collaboration between major firms that potentially benefits smaller companies researching new technologies in this industry and spawns new start-ups as well. Home communications in Linköping is recognised at the national level as an official competence centre. 4.

Views on Key Issues

In the view of the incubator manager the following points are critical in the successful setting up and management of business incubators: ·

Quality of business support – the Mjärdevi Science Park has established a comprehensive network of business support organisations that work closely with tenant companies. This is seen as one of the keys to its success.

·

Structured programme of business incubation. At the Mjärdevi Science Park incubator, start-ups follow a structured programme starting with entrepreneurship training, progressing through starter units to the growth units. This system, served by the Growlink network and careful on site attention, is seen as a distinctive feature of the incubation approach at the science park.

·

Linkages between university and science park/incubator – a number of schemes ensure that there are exceptionally close links. These include Growlink, the Entrepreneurship Development Programme, and the role played by the Technology Bridge Foundation (a national scheme that provides financial support for technology transfer) and University Holdings. Taken together these and other elements provide a structured framework for technology transfer and entrepreneurship. The higher education system, under which teaching staff own the ideas they develop, is also a driver of technology transfer and commercialisation.

·

Technology focus – Mjärdevi Science Park incubator acknowledges that business incubators/science parks may often have a particular technology focus, but that the focus must be truly reflective of the region’s and university’s strengths and

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that the incubator should be flexible enough to respond to changes in markets and evolving technologies. 5.

List of Interviews

Name

Position

Sten Gunnar Johansson

Chief Executive, Mjärdevi Science Park

Magnus Klofsten

Centre for Innovation and Entrepreneurship, Linköping University

Ewa Ljunge

President, University Holding

Ronny Mårtensson

Chief Officer, Department for Industrial and Commercial Development, City of Linköping

Mary Spaeth

Senior Adviser, Mjärdevi Science Park

Jan Hederén

Project Manager, HomeCom Linköping

Marcello Salgado

Manager, Business Development, Exechron

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