Incubation unit marks new era in start-ups

Incubation units nurture commercial activities, often from before their birth as start-up companies. Providing help with business plans, offering legal and financial advice as well as a home, business incubators are life-support machines for entrepreneurial ideas, and third-level institutions are setting aside more and more space for them on campus.

In the case of Dublin City University (DCU), this space amounts to 2,800 square metres over five floors - the size of the Republic's newest campus incubation centre, which opened just two months ago. Designed as a "hub of entrepreneurial energy", the centre, known as Invent, is the first of its kind to be opened under Enterprise Ireland's business incubation programme.

Inside, the first port of call for wannabe entrepreneurs will be the centre's "concept desk space", the place where business ideas will live or die, according to Dr Tony Glynn, the centre's director.

"It's easy in, easy out," he says. "If someone has a business idea then they can come to the centre, use the desk space and the computers, and either develop the idea or kill it off within a month or six months. In that time, the person may realise that their idea isn't commercially viable, that it isn't going anywhere. That is also a service."

Four companies - First Tuesday, Aliope, Glenard and 3TL - already rent space in the centre, and the board is in discussion with a further eight. The companies are a mix of graduates or external entrepreneurs who want to access the university's resources, and companies that have developed from the research activities of staff and students.

It is this second group - companies that turn the results of research and development at universities into profits - that many innovation experts believe is vital to the Irish economy.

"Training and research are the primary responsibilities of third-level institutions, but we would like them to recognise that creating intellectual property is an important function as well," says Dr David Melody, who is vice-president for R&D at Loctite (Ireland) and a member of the Irish Council for Science, Technology and Innovation.

The council, which advises the Government and the board of Forfβs on innovation issues, is examining the prospect of conducting a follow-up study to its report on the commercialisation of publicly funded research, published last February.

In that report, the group said that universities and institutes of technology should see the commercialisation of R&D as "an essential mission".

The council has recommended that Enterprise Ireland, which operates a range of funding schemes such as the Campus Companies Programme and the Research Innovation Fund, could play a more pro-active role in supporting new ventures arising from research in third-level institutions.

A number of institutes and universities have applied for funding under Enterprise Ireland's Incubator Centre Scheme. The agency has contributed €1.65 million (£1.3 million) to the Invent centre at DCU and €1.27 million to the NOVA Innovation Centre at UCD, while NUI Galway has applied for funding to add 18 units to the eight-unit nursery at its existing innovation centre.

Dr Joseph Watson, industrial liaison officer at NUI Galway, believes it is only in recent years that national agencies have begun to promote the transfer of technology from the academic to the corporate world.

At Invent, Dr Glynn agrees that there has been a "sea change" in Government attitudes to funding.

Mr Jonathan Stanley, managing director of 3TL, says the one- to-one support services offered by incubators are particularly important for campus enterprise schemes.

"Some people with an idea might be good academically but might not necessarily have the business experience," he says. "When 3TL started it was just the founder, Andrew Byrne, and his brother, and they were from a technical background."

The company now employs 10 people.

For 3TL, an 18-month-old company that develops software products for the wireless internet market, the decision to locate at the Invent centre was partly due to personal reasons - Mr Andrew Byrne is a graduate of DCU - and partly due to practical ones, such as access to high-skilled graduates in a research environment.

Flexible rent agreements may also attract young companies to campus locations.

"With any start-up, the space they need is going to change every three to six months," Mr Stanley notes.

Rather than renting pre-sized units, Invent offers its clients the option to expand the amount of space they need throughout their stay in the unit.

If it acted as a normal office block, Invent could probably house 40 companies, says Dr Glynn, who instead envisages between 20 and 25 groups locating at the centre at any one time.

"The whole idea is to allow for companies to grow, so we will keep space free next to our clients. Or unfortunately if things are not going so well, there may be a contraction in the amount of room they need," he explains.

Rent agreements at campus innovation centres tend to be as short-term as they are flexible. After a maximum of three years, the start-up has to grow up and leave home.

"I think if a company is not successful within three years, then it is never likely to be. It must at least have very strong vibes that it is going to succeed by that time," says Dr Glynn. "We don't want to deal with companies that are going to be static - that's not the business we're in."

Dr Melody believes the rewards for investment on campus can spiral, citing the creation of Silicon Valley as an example.

"The more success we see from campus companies, the more likely it is that more money will be invested to support them," he concludes. "It is very important to have role models in colleges so that academics can see their peers making a good return. This is why universities in California have been so successful."

In the early 1950s, the success of two engineering graduates from Stanford University in California - William Hewlett and David Packard - prompted the university to set aside 579 acres for industrial development next to the campus: Silicon Valley. And, for these founders of corporate giant Hewlett-Packard, their incubator unit was just a makeshift garage.