Incubator Support
March 2016
http://www.innovation.gov.au/page/incubator-support-programme
Contents
Intent 3
Background 3
Component One: New Incubators 4
Component Two: Existing Incubators 5
Component Three: Expert-in-Residence 6
Questions 6
How to provide feedback 7
Feedback on Incubator Support 8
Intent
This paper describes the draft programme parameters of Incubator Support and seeks feedback from stakeholders on the questions outlined at the end of the paper. Responses to the discussion paper can be submitted electronically to . Stakeholders also have an opportunity to provide verbal feedback as part of a series of consultations in March 2016.
Feedback received through this paper and consultation sessions will contribute to the finalisation of programme guidelines.
Background
National Innovation and Science Agenda
Incubator Support is part of the National Innovation and Science Agenda (the Agenda), a $1.1 billion package of measures released by the Australian Government on 7 December 2015 that aims to transform Australia into an innovation nation.
Through the Agenda, the Government’s goal is to help create a modern, dynamic, 21st century economy for Australia by incentivising innovation and entrepreneurship, rewarding risk-taking, and promoting science, maths and computing in schools.
The Government's vision is to create an ideas boom that will turn Australian ideas into successful products, services and businesses, and that will encourage the creation of new industry, helping to diversify Australia’s economic base away from the resources sector and the receding mining boom which has helped Australia achieve over two decades of consecutive economic growth.
Incubator Support will contribute to the Government’s priorities by supporting incubators, accelerators and related business support organisations that can foster the development and growth of high-potential start-ups.
Entrepreneurs’ Programme
Incubator Support will be a new element of the Entrepreneurs’ Programme (EP), complementing Business Management, Innovation Connections and Accelerating Commercialisation. EP provides a comprehensive suite of support options for entrepreneurs, researchers and businesses to address the key challenges associated with business development and the commercialisation pathway.
The support provided to startup companies through incubators funded under the Incubator Support initiative may assist in facilitating access to further assistance through the other elements of EP. For instance, funded incubators may provide information to their startup businesses on the range of assistance offered through the EP, and direct referrals may be made to AusIndustry. Similarly, AusIndustry may also refer startup businesses to particular incubators that have been funded under Incubator Support.
High-potential start-ups
Entrepreneurial activity and innovative start-ups are integral to a country’s competitiveness, economic viability, growth and long term sustainability in a globalised world. The start-ups with the potential to create the greatest economic impact are those with global ambitions and the ability to disrupt large markets using technology. Start-ups which are closer to the right hand side of the spectrum below can be considered to have greater potential to create significant economic impact than those on the left side.
Start-ups at the far right end of the above spectrum – highly innovative, globally focussed companies – form a very small category in numbers in any country and are a heterogeneous group, existing in a wide range of industries and using a variety of different business models. Incubator Support aims to support organisations that are able to foster and develop these sorts of businesses.
What is an Incubator?
Entrepreneurs operate in a broader ecosystem in which various players, such as Incubators (and related start-up support organisations such as accelerators, germinators, pre-accelerators and mentoring organisations), venture capital firms, universities and service providers (lawyers, accountants and others) play important roles.
For the purposes of Incubator Support, an Incubator is defined as a support organisation for high-potential start-ups. This can include a variety of different organisations including incubators, accelerators, co-working spaces, science parks, innovation hubs and mentoring organisations.
The name of the organisation is less important than what it does. The target recipient of Incubator Support is an organisation that has the capability to foster and develop innovative, globally focused businesses.
Component One: New Incubators
This component will provide funding for the establishment of new Incubators in either new regions or new sectors. The establishment of new Incubators aims to boost the commercial prospects of innovative, globally focused Australian start-ups to develop and commercialise their products, processes or services by providing mentoring support and access to additional capital and networks. Supporting new Incubators will also help to establish a wider-reaching and more connected innovation ecosystem within Australia (and across its regions), by providing the infrastructure to support entrepreneurial activity and resulting economic benefits for the long-term.
Grants under the New Incubator component are likely to be capped at $200,000 and will be provided through a competitive merit-based process to Incubators to assist them in the establishment of their operations. The Government’s funding will leverage private capital and applicants will be required to match the funding at a minimum of 1 to 1. Grants will be provided for eligible expenditure which may include salaries and wages, costs relating to Incubator workshops and events, and costs relating to rent, fit out, and office supplies.
Given the quantum of funding that is available under this component and the costs involved in establishing a new Incubator, applicants are likely to be more competitive if they have received other forms of support in the local or regional ecosystem, such as from a corporate sponsor or local or state government.
Support will be targeted at regions with innovation potential such as connectivity and existing infrastructure (eg. proximity to universities or industry), access to capital and talent but lacking existing early stage support mechanisms such as Incubators.
Support will also target specific sectors where there are the greatest gaps in start-up support infrastructure for innovative, globally focused start-ups. Sectors where there are already a lot of incubators, accelerators and other support mechanisms are likely to be less competitive in the merit-based selection process than sectors with a lack of start-up support organisations.
Sector eligibility requirements for the New Incubator component will also align with the Government’s Industry Growth Centres Initiative, although applications outside of the Growth Sectors will also be welcome.
Merit criteria under the New Incubator stream may include the following:
· Innovation potential of region or sector
o Applicants will need to provide evidence on features of the region or sector such as: strategic alignment with a university, relationships or agreements with universities, hubs, industrial areas (including a large corporate).
· Management capability
o Applicants will need to describe the track record and capability of key personnel involved in the establishment of the new Incubator in areas such as: entrepreneurship and commercialisation experience, community management skills, track record of investment attraction.
· Business Capability
o Applicants will need to describe the features of the proposed new Incubator, such as: seed funding, cohort, co-location, structured programme, mentoring, professional services, networking events ongoing viability and capacity to support innovative, globally-focused start-ups.
Component Two: Existing Incubators
This component will provide matched funding for eligible expenditure to expand or enhance the current service offerings of Incubators, and enable high-performing incubators to either support a greater number of promising innovative, globally focused start-ups, or enhance the service offerings for its currently supported start-ups.
Grants under the Existing Incubator component are likely to be capped at $50,000 per eligible activity and will be provided through a competitive merit-based process to Incubators to contribute towards the expansion or enhancement of existing service offerings. The Government’s funding will leverage private capital and applicants will be required to match the funding at a minimum of 1 to 1. Grants will be provided for eligible expenditure related to eligible activities.
Eligible activities may include:
· activities that encourage a greater number of quality applicants to Incubators, such as:
o Hackathon events
o Community engagement and outreach events
· activities that improve the service offerings for start-ups, such as:
o Workshops on intellectual property protection
o Workshops on regulatory advice for export-oriented businesses
o Facilitation into Accelerating Commercialisation
Merit criteria may include the following:
· Management Capability
o Applicants will need to describe the track record and capability of key personnel involved in the running of the Incubator in areas such as: entrepreneurship and commercialisation experience, community management skills, track record of investment attraction.
· Business Capability
o Applicants will need to describe the features of their Incubator and how they are able to support innovative, globally-focused start-ups, such as: seed funding, cohort, co-location, structured programme, mentoring, professional services and networking events. Impact of proposed activity
· Impact of proposed Activity
o Applicants must describe the proposed activity and explain how it can improve the commercial prospects of innovative, globally focused start-ups. Applicants must demonstrate that the Government funds will contribute towards an activity that would not have occurred otherwise and therefore is additional to the normal operations of the Incubator.
Component Three: Expert-in-Residence
This component will provide funding for eligible expenditure to support secondments of experienced employees from national and international institutions (through partnerships with relevant organisations) or activities where national and international experts can build linkages between Australian and other entrepreneurship ecosystems.
Example activities:
· supporting a senior software engineer from a large company to work in incubators and provide technical expertise to multiple cohorts of start-ups which would not normally be able to afford access to experienced talent.
· supporting the costs for an international expert in incubator best practices to travel around Australia and give advice on Australian models of incubation.
Matched funding at a minimum of 1 to 1 will be provided to applicants provided that they meet criteria which may include:
· Capability
o Applicants will need to provide information on the particular skills, expertise and/or qualifications of the expert, such as: knowledge and experience working with start-ups, business management, global commercialisation experience, access to strategic domestic and international networks.
· Impact
o Applicants will need to describe the proposed activity and how it can improve the commercial prospects of innovative, globally-focused start-ups, and also how it can develop the regional entrepreneurship ecosystem, and/or build national or international linkages and networks.
Questions
1. What lessons can be learned from existing business support programmes that should be incorporated into the design and implementation of the incubator Support Initiative?
2. How can this initiative best complement similar state and/or territory based activities?
3. What types of activities could be supported under the three components and are the suggested caps appropriate?
How to provide feedback
Consultations for the initiative will be begin 15 March and continue until early April 2016. To assist the Department of Industry, Innovation and Science in compiling and analysing the views of individuals and groups, respondents are encouraged to provide their written feedback by submitting their views to using the template overleaf.
Feedback on Incubator Support
Please email your feedback to using the template below.
Contact details
Name: /Organisation and position: /
Contact Details (optional): /
Please provide your comments using the table below.
Question / Comments: /Question 1: What lessons can be learned from existing business support programmes that should be incorporated into the design and implementation of the incubator Support Initiative?
Question 2: How can this initiative best complement similar state and/or territory based activities?
Question 3: What types of activities could be supported under the three components and are the suggested caps appropriate?
Do you have any other comments/suggestions?
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Issue Paper