Bi I bt dBusiness Incubators and Accelerators: The ...€¦ · UK Accelerator & Incubator Database:...

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B i I bt d Business Incubators and Accelerators: The National Picture Cardiff Metropolitan University, 25 th October Jonathan Bone, Researcher, Nesta @JonoBone

Transcript of Bi I bt dBusiness Incubators and Accelerators: The ...€¦ · UK Accelerator & Incubator Database:...

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B i I b t d Business Incubators and Accelerators: The National PictureCardiff Metropolitan University, 25th Octoberp y,

Jonathan Bone, Researcher, Nesta@JonoBone

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About Us Mission to ‘help bring great ideas to life’

Policy Analysis & Policy, Analysis & Research

Tools & SkillsTools & Skills

Investments

Practical Programmes

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2015

2016

2011 2012 2013 2014 2015 2016 2017

AccelerateUKCapacity Building in Colombia

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Net Employment growth rates by surviving firms, 2001-2011

Source; Criscuolo, C., P. N. Gal and C. Menon (2014), "The Dynamics of Employment Growth: New Evidence from 18 Countries", OECD Science, Technology and Industry Policy Papers, No. 14, OECD Publishing, Paris. DOI: http://dx.doi.org/10.1787/5jz417hj6hg6-en

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• Good at starting businesses (383,075 business births in 2016)• Only 2 in 5 make it to be 5 years• Only 2 in 5 make it to be 5 years• Around 1 per cent become scale-ups - growing by 20%+ or

more or 3+ yearsShift 1% f SME ith 10 49 l i t l• Shift 1% of SMEs with 10-49 employees into scale-ups -> + £7bn GDP

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2015

2016

2011 2012 2013 2014 2015 2016 2017

AccelerateUKCapacity Building in Colombia

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Aims and Methodology

Aims

• Produce a comprehensive directory of incubators and p yaccelerators in the UK

• Understand what incubators and accelerators in the Understand what incubators and accelerators in the UK look like, identifying where they are located and what sectors they cover

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Definitions

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The directory

What we did:

• Data collection took place November 2016 and March 2017• Aggregation of existing databases

A ll t i b t d l t • An open call to incubators and accelerators • Synoptica’s artificial intelligence engine• Manual web searches

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UK Accelerator & Incubator Database: Data gathered1. Name of programme and/or facility2. Organisation name (if different)3. Type of programme i.e. incubator, etc

13. Sectoral focus14. Stage of startup accepted15. Additional entrance requirements

4. Source of information5. Address6. City

16. Cohort size17. Number of businesses served per

annum6. City7. Country8. Local Enterprise Partnership9 Public Contact details

18. Programme duration19. Support offered20. Direct funding offered9. Public Contact details

10. Geographical coverage11. Website URL

g21. % Equity taken22. Fees /cost to startups23 Programme description12. Funding sources 23. Programme description24. Year founded

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Results

Numbers:• 205 Incubators• 205 Incubators• 163 Accelerators • 11 Pre accelerators• 11 Pre-accelerators• 7 Virtual accelerators • 4 Virtual Incubators• 4 Virtual Incubators

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Overview - Incubators

• 205 active incubators in the UKSupport offered

58%58%

100%

Mentoring

Networking connections / Access to …

Office / Work space205 active incubators in the UK

• Supporting around 3,450 new businesses a year

• Average residency ~2 years

19%25%25%

31%

Training

Funding advice

Laboratory space

Seminars / Workshops• Average residency ~2 years • All provide office space• More than one in four offer

t ki ti /

5 3%9.7%14%14%

h t (i t)

Legal / Accountancy support

Access to experts (inc. academics)

Direct Funding (e.g. grants or equity …

gnetworking connections / access to investors, mentoring, seminars / workshops, laboratory space or funding advice.

0.48%4.8%5.3%5.3%

Access to manufacturing and design …

Investment readiness

Demo days

Tech support (inc. IT support)g

0% 50% 100%Percentage of Incubators

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Overview - Incubators

• 14% provide funding Funding sources

14% provide funding • 8% take equity • Majority of incubators funded

through fees / rentthrough fees / rent• Often subsidized by public or

university fundingC t t t t > l t • Cater to pre-startup -> later stage scaling ventures but concentrate on early-stage ventures

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Overview - Accelerators

• 163 active accelerators in the UKSupport offered

163 active accelerators in the UK• Supporting around 3,660 new

businesses a year• Average cohort = 16• Average cohort = 16• Average duration ~6 months • 85% offer mentoring• 61% offer funding • More than one in four offer

seminars or workshops and network connections or access to investors

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Overview - Accelerators

• Average investment of £39,000 Funding sources

Average investment of £39,000 • ~£33 million invested per year• 46% take equity in startups

(average 7% share)(average 7% share)• More than half funded by

corporatesM th 40% i bli • More than 40% receive public funding

• Only 8% funded by VC• Cater to similar business stage

profile to incubators

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Sectoral distribution

• The Majority have no sectoral focus or a broad digital focus• High reliance on public funding by Agritech & Transport incubators and

Space and Satellite accelerators

Incubators Accelerators

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Geographic Distribution

• More than half of accelerators based in London• More than half of accelerators based in London• Incubators more evenly spread throughout the UK• North East incubators solely reliant on Public funding

Some LEPS (Marches and C mbria) ha e no Inc bator or • Some LEPS (Marches and Cumbria) have no Incubator or accelerator

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Trends

• Rapid growth in numbers - nearly all Rapid growth in numbers nearly all accelerators and more than half of incubators were created since 2011

• Expansion of accelerators outside Expansion of accelerators outside London – to Birmingham, Bristol, Manchester etc.

• Growth in corporate funding of Growth in corporate funding of accelerators - 65% created since 2014 funded by corporates vs. 29% of created before 2014

• Diversification of models – pre-accelerators, virtual programmes etc.

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Avenues for further research

• Is the rate of growth sustainable or are we in an 'accelerator bubble'? Is the rate of growth sustainable, or are we in an accelerator bubble ? • Are corporates gaining value from accelerators, or simply mimicking

competitors? I bli d d t d i t i t i ?• Is public money needed to drive more support in certain areas?

• Do some regions of the UK have too many support programmes, or will their presence help stimulate further demand for their services?

• Do accelerators and incubators work?• What is the cost-effectiveness of accelerators and incubators compared

to other business support models and interventions

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Avenues for further research

• New BEIS funded study with LSE, Open University and BeauhurstNew BEIS funded study with LSE, Open University and Beauhurst• What is the impact of accelerators and incubators?

• Survey of incubators and accelerators in directory• What are the barriers startups face?What are the barriers startups face?• What are they doing to help overcome these?• Build sample of startups they have accepted / rejected• How they scored startups they accessedy p y

• Survey of firms that have been through programme• Barriers and support they received• How successful they have been since – Investment, turnover/employee growthy p y g

• Survey of rejected firms• Barriers and if/how they overcame them? • Accepted on to another programme?p p g• How successful have they been since rejection?

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Avenues for further research

• Compare success of those who were accepted to those rejectedCompare success of those who were accepted to those rejected• Selection bias• Regression discontinuity analysis

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nesta.org.uk

@nesta_uk

Download the full report and directory here:

https://www.gov.uk/government/publications/business-incubators-and-accelerators-the-national-picture