Innovation

DICember 4, 2006 / Number 8

A way of life

By Antonio Zárate

As we have said before in this column, the Monterrey, International City of Knowledge Program is an alliance between the government, universities, and the private sector, seeking to achieve sustained economic growth via innovation.

In order to achieve this goal, there are four "how's" or basic strategies: to redesign the educational system, to attract innovation businesses and centers to Nuevo Leon, to promote innovation in existing businesses, and to promote the creation of innovating businesses.

The creation of businesses that focus on innovation is a clear manifestation of economic growth, and this is reflected in sales and new job sources.

However, the most important aspect is that these businesses have a high potential to carry out patentable technological developments, which translate in long-term value added.

In order to survive, these businesses require administrative and financial support, in addition to a global perspective that will allow them to visualize the positioning of their products and services in the market.

In this context, what matters is to know who to go to, and when to go.

Incubators for technology-based businesses are an excellent option, since they already have the talent, resources, infrastructure, and link networks to guide those who want to start their own business or give a new direction to a business already in operation.

Incubators that operate within universities confirm that collaboration between higher-education institutions and businesses already exists. After all, both players are trying to achieve the same objective: to accelerate economic engines in order to improve the quality of life in our society.

All entrepreneurs and businessmen and women have access to these incubation centers. It doesn't matter if they belong to or at any point in time were part of an academic institution. What matters is their initiative and their capacity to propose a feasible business plan.

Monterrey , International City of Knowledge is part of this effort through various promotion and linking initiatives. In addition, the Research and Technology Innovation Park, presently under construction in Apodaca, will also include several technology-based incubators.

This business support system is here to stay because incubators have demonstrated that they can make the difference between a good idea and a good business.

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Transforming ideas into good businesses

Business incubators apply a very simple principle: two heads think better than one. And most importantly, those heads know about businesses.

A great and innovative idea is an excellent starting point, but it is never enough for the development of a good business.

Those who move in the business world say that the best thing one can do is to team up with those who know, those having the capacity to smell, visualize, and take advantage of business opportunities.

"You need to be creative and visionary," emphasizes Elisa Cobas, Director of the Program for the Development of Technology-based Businesses of the Monterrey Institute of Technology and Higher Education (ITESM) and Associate Professor at the Administration and Business Management Graduate School (EGADE).

She points out that business incubators are a very useful resource for putting ideas into practice, since they provide qualified consultancy, already equipped offices, shared services, access to specialized information, as well as links with financing sources, investors, and business organizations in Mexico and abroad.

Access to capital is one of the services that business men and women value the most, since incubators offer consultancy and support to expedite the process.

Nuevo Leon has three types of incubators: traditional, intermediate technology, and high technology. Even though most are part of universities, some are managed by municipal governments and others by the private sector. All of them, without exception, are open to the general public.

Besides being a breeding ground for new businesses, incubators help already established entrepreneurs who seek to give a new direction to their businesses through technological development, internationalization or technological commercialization.

The first incubators emerged in the 90's. However, they began to produce results only after the year 2000, when businesses, universities, and government decided to work together to make the "Triple Helix" a reality.

Ricardo Garza, Director of Intermediate and High Technology Incubators for the Universidad Autonoma de Nuevo Leon (UANL), points out that this model is one of the pillars of the Monterrey, International City of Knowledge Program, since it promotes the creation of innovative businesses that make use of technology in order to develop or optimize products, processes, and services.

UANL, which has four incubators, is already working to create an additional one specializing in agrobusiness, which will be operated by the School of Agronomy.

Garza points out that this institution is the only one in Nuevo Leon certified by the Ministry of Finances to develop businesses that focus on rural areas.

The incubators apply a three-stage model: pre-incubation, incubation, and post-incubation or acceleration.

During the pre-incubation stage, projects are analyzed by selection committees formed by academicians, researchers, entrepreneurs, and representatives from public and private organisms.

The most important aspect during this stage is to develop a feasible business plan. "Many come with very vague ideas, particularly in the market and competitiveness areas, due to lack of information," expressed Karina Astorga, Director of the Incubation and Business Development Center of the Universidad de Monterrey.

Pre-incubation is a critical stage because experts analyze each proposal through a magnifying glass and issue a diagnosis that determines the destiny of the projects. Some candidates have to change their original idea completely, others make adjustments, some decide to associate with others, and others prefer to take the necessary time to develop a whole new proposal.

"An essential factor is intellectual property. Things must be commercialized, but it is more important to generate patents, since that is what creates value for a business," Cobas pointed out.

As they go into the incubation stage, entrepreneurs have the option to establish their offices in spaces provided by the incubator or work in their own facilities and only attend consultancy meetings and results review sessions.

The monthly cost of this service, including offices and consultancy, ranges from 3,000 to 5,000 pesos.

"The first thing that kills small and medium businesses is costs, because they cannot compete with big businesses. We help to reduce those start-up costs," explained Benjamin Hinojosa, Coordinator of the Business Incubator at Universidad Regiomontana.

Each business submits a monthly progress report to its administrative board, which is made up of consultants and incubator employees. "The most important aspect is for entrepreneurs to become goal oriented, since results are the vital signs of the business," said Garza.

The length of the incubation period depends on the type of business and its evolution. Some are ready in one year. In contrast, high-tech businesses may require up to three years.

A business graduates when it shows that it manages a consolidated sales process. It is at that point that the post-incubation stage begins, which requires follow-up of the operation to verify that the business moves on as a profitable business.

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FUTURE EVENTS

DICIEMBRE 19
“China, Opportunities for Mexican Enterprises”
Lecture by Alfonso Araujo
Centro Convex
Cost: $500 pesos. Information: 8064-2948

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