Business incubator: ‘Start-ups need protection’

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Around 80% of start-ups at a business incubator in the south of Ireland are thriving five years after launch – a success rate far greater than is typical for new ventures. In an interview with EURACTIV, Josette O'Mullane, coordinator of the Genesis Enterprise Programme – shortlisted for the European Enterprise Awards – says the on-campus business centre provides new companies with a safety net while they find their feet.

Josette O'Mullane is industry liaison manager at Cork Institute of Technology, Ireland, and coordinator of the Genesis Enterprise Programme.

She was speaking to Gary Finnegan.

To read a shortened version of this interview, please click here.

What is the Genesis Enterprise Programme (GEP)?

We call it a one-year rapid incubation programme for entrepreneurs who want to start a business. We have been running the programme now for 13 years and almost 200 entrepreneurs have passed through the programme.

In an extensive survey we found that around 80% are still in business five years after starting – a very high success rate for start-ups.

The programme is run by Cork Institute of Technology but is in partnership with a number of local agencies responsible for business development, including Enterprise Ireland, the Cork City & County Enterprise Boards, the Cork BIC (Business Innovation Centre) and University College Cork (UCC).

Where precisely is the GEP located?

It's run out of our on-campus incubator where it's housed alongside a whole range of other start-ups. So from day one they are hooked into a network of potential business partners, investors, mentors and people to talk to about starting a business. And they say that what they learn from one another is crucial, but being in that environment is what participants tell us is the most important element of the programme.

What kinds of industry participate?

It varies. We have energy companies, food companies, a lot of ICT companies – because of the kind of premises we provide, we have had some fabulous IT design companies, and a range of international service companies as well.

If an entrepreneur comes to you with an idea, how do they get accepted onto the programme?

It's an annual intake onto the programme, so there are a series of meetings and then an interview at which several criteria are applied to the type of companies we like to see on the programme. These would include potential to scale, potential to trade internationally, and potential to create employment.

What do they get from the programme?

They get free space, access to the Internet and telephone – for free. They get 30 days' systematic training over the course of the year, individual sessions with a mentor, and the expertise of managers here who can advise on their business.

Are the mentors from the same sector as the start-up, or are they people with general experience in running a business?

The mentors are carefully matched with the entrepreneurs depending on their stage of development and the sector that they are in. We have a huge panel of mentors to choose from in the region now. They can be existing businesspeople or retired entrepreneurs.

In terms of funding, how much does it cost and who is paying?

It's all channelled through the Irish government, primarily through the Department of Education as it's effectively a training programme delivered through CIT, which is a third-level institution. The funding is €200,000 a year.

That sounds relatively low given the numbers that have passed through the programme. What does €200,000 pay for?

It's very efficient. It's lean and mean. The funding covers the administration, training [and] use of the facilities. There are a lot of people involved and, to be fair, we get a lot of work done pro bono by the local business community. The programme tends to leverage goodwill towards start-ups. A lot of local solicitors, accountants and banks come in and give free training for us. At the end of the day, we all benefit because this creates jobs and that raises tax revenues.

Around four out of five are still going five years after they started. This would be much better than the norm. To what do you attribute this?

I think the typical success rate is closer to one in ten for start-ups that receive no help. So this is a very good rate. First of all we only select businesses we think will survive. Secondly, we help them to make their mistakes within 12 months in a very protected environment, and they are learning from the mistakes of the people that went before them. It's not like a regular start-up which is out there on its own. The success rate has to be better in this kind of environment.

They don't have to set up phone lines or deal with landlords. And a lot of them go on to move into their own units in the incubator afterwards – there's now a waiting list for office space in the incubator – where they would have to pay like any other licensee, after they have completed 12 months.

Of the people who come to the GEP, would many be past pupils of CIT and UCC?

They would. Now, you have to have a degree to enter the programme – it's one of the selection criteria. You have to have a minimum of an ordinary degree [which takes three years in Irish universities] and we find most of the applicants have more than that.

If somebody had a particularly promising idea but had not completed a third-level degree, would they be refused? Plenty of successful entrepreneurs did not excel in formal education systems. Is it appropriate to leave them out of these kinds of scheme?

Well, what we have done in those cases, is certify people to go on the programme by recognising their prior learning. CIT is very expert in recognising prior learning and experiential learning, so we've been able to say that work experience and other training they may have done is equivalent to an ordinary degree based on [that]. We do that anyway in CIT for people who want to go on and do other courses and have done it where necessary for those who want to get on the programme.

This is held up as something of a success story. Has it been copied by other regions?

It has. We were the first to operate this model on a partnership basis. Similar things have been done where institutions have run incubators themselves, but by bringing in other partners we feel we've put together a strong offering for entrepreneurs. It has been replicated in Ireland and could be rolled out in other European regions also. A lot of people are working together to help entrepreneurs, but we feel it's important to bring together all the people working in this area.

In terms of funding for the future, are you confident that the GEP will be untouchable when the government is looking for things to cut?

Well, nothing is untouchable at the moment but we would hope the value of this is appreciated. In terms of the smart economy and national policy on supporting indigenous industry, this kind of programme is very important.

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