Supporting technology transfer:
The role of business incubators
John Gabriel Goddard
Knowledge Economy Forum VII
Ancona, Italy
Issue #1: Speed of adoption of “new
technologies”
Penetration of recent technologies
Global Economic Prospects (2008)
Issue #2: Level of absorptive capacity
Technology absorptive capacity
Global Economic Prospects (2008)
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Issue #3: Science-Industry links
%
60
Firms collaborating in innovation
with higher education institutions
OECD Scoreboard (2007)
50
SMEs
Large firms
40
30
20
10
0
Issue #4: Entrepreneurial culture
Total Entrepreneurial Activity (TEA
Global Entrepreneurship Monitor (2002)
Rapid growth of European Business
Incubation (BI) facilities
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50% of incubators
began to operate in
the last 5 years
Upwards of 5,500
people work in EU
incubators
Around 24,000 firms
receive services
Survey
of European Business Incubators (2006)
Survey of European Business
Incubators (2006)
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936 BI managers contacted in the EU-25
BI definition = on-site rental space and
business support
Focus of the survey was BI characteristics,
start-up risks and financing gaps
170 responses received, a response rate of
18%, with 10%+ in all countries
Carried out at Paris Dauphine University with
funding from an EC research grant
Non-profit BIs supported by public/
mixed funding are most common
Figures highlight the:
 Widespread use of
incubators in
entrepreneurial and
innovation policy
 Weak interest of the
private sector in this
service model due to
risks and lags of
business creation
Innovation and technology transfer are
central to European BIs

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The popularity of technology BIs points to the
perceived usefulness of this model for fostering
technology transfer; and availability of EU funds
BIs are active in software, digital media and biotech
industries
Yet, major risks facing start-ups are
commercial
Business incubation: a public solution
to accelerate technology transfer

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Business incubators are a leading instrument
used by European governments to facilitate
technology transfer from public research
organizations
Commercial risks pose a greater problem
than technical risks when taking R&D results
to market, not least because spin-offs are
often founded by scientists with technical
capacities but without business skills
BI managers need strong business
background

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Effective screening at entry and mentoring
require business experience, preferably in
related products markets
Specialized technical/IPR advice can be
provided by external experts
Even so, “rules of the game” will
frame the BI manager/tenant
incentives
 Pressure to deliver quick results can distort
the incentives of BI managers

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Possible bias to select companies with high
potential but no real need for BI services
Start-ups may delay exit to benefit from
subsidized rents/services
Rules of the game need to be made
compatible with overall BI strategy and
reduce these incentive problems
Tailored financial services critical to
manage start-up and scale-up costs
And also:
•Syndicated capital from third party investors
•Agreements with local banks to test new forms of financing
Concessional support/grants can be
useful at the initial phase
BIs as part of a public (or PPP)
platform for technology transfer

Can BIs be planned as stand-alone entities?
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Need for proximity to deal-flow from research
organizations and economic poles
Fostering linkages and cooperation with the
National/ Regional Innovation System?
Merging the functions of BIs and other
instruments (e.g. S&T parks, Technology
Transfer Offices, VC funds)?
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Capacities, networks and goals are different
Instruments needed at different stages
Thank you!
John Gabriel Goddard
Email: jgoddard@worldbank.org
Tel: +1 202-631-8158