A new model for business incubators can stimulate economic development and lead to significant employment opportunities.
This is according to Chris Vermeulen, GM of Bandwidth Barn., who explains that the traditional role of a business incubator has been to support the growth and development of an existing start-up company.
"And it is a role that has been performed very well," he says. "Thanks to incubators all over the world, entrepreneurial enterprises have experienced more resilience, and have achieved a high level of success.
"However, there is an opportunity for incubators to broaden their scope, and play a far more influential role in the economy. A new model, which adds to the traditional incubator’s support for business growth, would also offer a broader skills development component, and a business creation stream to encourage the development of new innovations beyond the ideas phase."
He says a trailblazing incubator-turned-development agency has demonstrated what is possible when these components are correctly combined. Barcelona Activa – which began as a modest incubator coaching 14 start-ups in 1986 – is today considered to be the primary instigator of employment and innovation in the city of Barcelona in Spain.
Barcelona is an example of rapid transformation from a classical industrial city in decline to one that has a dynamic economy with a world-class reputation. The 1992 Olympics provided a springboard for the development of a strong brand, which sees Barcelona positioned as a primary hub for innovation and entrepreneurship in Europe.
While there are many factors that have contributed to both the city’s and Barcelona Activa’s success over the past 20-plus years, the model which the agency focuses on today offers a powerful blueprint for incubators around the world.
"In this model, the traditional support for entrepreneurs already in business is still important," says Vermeulen. "Critical factors that enable them to flourish include mentorship and business skills training, the creation of networks and peer groups, and the provision of a physical space with affordable rent and services.
"The second pillar in the new model would focus on stimulating business creation. This would see an incubator initiating programmes which would encourage people to generate new business ideas, and then support them to turn the idea into a business plan. Not only does this encourage job creation, but it would also spur the development of an entrepreneurial culture, creating a snowball effect.
"The model’s third pillar is focused around skills development. While this has always been a major component in an incubator’s strategy, the new approach would expand this offering beyond entrepreneurs already in business.
"For example, Barcelona Activa introduced programmes to develop the broader workforce and provide skills that would bring them closer to the demands of a knowledge-based society. Practically-speaking, this includes basic computer skills training and vocational training to empower low-skill individuals."
By embracing this new approach, Vermeulen says incubators can play a powerful role in job creation by providing broader support at a number of levels. They can be catalysts for innovation and an entrepreneurial culture – both critical drivers for economic growth and development in South Africa.
"To achieve this, it will be helpful to take a few leaves out of Barcelona Activa’s book. One of the key factors in its success was its close relationship with the City Council. In Cape Town, we are fortunate to have a visionary Municipality who is taking this opportunity seriously.
"If we get it right, we have the chance to create some magic, and potentially turn Cape Town into an innovation and entrepreneurial hub for Africa."