Promoting techno-entrepreneurship through incubation: an overview at BADIR program for technology incubators.

Author:Khorsheed, Mohammad S.
Position::Technology Incubation Program
 
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Knowledge-based technology innovation is essential for encouraging economic development in a population. Most universities and research centers foster the growth of new technology-based companies by establishing business incubators (BIs). These incubators include resources to augment skills and to support the innovation-to-commercialization process (Soetanto, 2006). Saudi Arabia has implemented the use of BI processes as a national policy, which has led to government-supported programs. The BADIR for Technology Incubation Program (BADIR) spearheads this program from within the Technology Development Center (TDC). This article introduces BADIR's role in the BI process, which has been established nationally through governmental policy and programs in Saudi Arabia to stimulate technological innovation; presents the BADIR framework and methodology; and discusses BADIR's achievements and performance measures.

Business incubation

Business incubation is defined as a business support process that accelerates the successful development of start-up and fledgling companies by providing entrepreneurs with an array of targeted resources and services (Kathleen, 2006). Bis are also focused on improving the business environment for small and medium-sized enterprises (Colombo & Delmastro, 2002). To understand the scope of support needed for a full BI program, incubators are broadly categorized into three main types, depending on the tenant firms' objectives and characteristics: Mixed-use incubators, economic development incubators and technology incubators. Mixed-use incubators promote continuous regional industrial and economic growth through general business development. Economic development incubators narrow down the regional development gaps by creating jobs and industrial restructuring (Aernoudt, 2004). Technology incubators help transform research and technology-based ideas into commercial products and services by fostering the creation and growth of start-up companies.

The main goal for BIs is to produce successful firms that are economically viable and self-sustaining within a reasonable time. This process creates jobs, commercializes new technologies, and strengthens the overall economy (Yee, 2009). The impact of incubators on technological firms and economy is documented in the United States (VanSant et al., 2010), Europe (Adebanjo, 2010), Asia (Jusoh, 2006), the Middle East (Saidam, 2007), and Australia (Martinez-Fernandez, Soosay, Bjorkli, & Tremayne, 2004). Some of those incubators operate in multiple countries (Collinson & Gregson, 2003; Hallam & DeVora, 2009; Winden & Woets, 2003).

There is an increasing effort in Gulf Cooperation Council (GCC) states to support Bis to improve entrepreneurship (Al-Mubaraki & Busier, 2010). These efforts have been and are still playing an important role in enhancing GCC states' competitiveness globally, e.g., five of the GCC states are among the top 20 countries around the world where entrepreneurs with innovative but risky projects find venture capital easier than elsewhere (Schwab, 2010). In Bahrain, Bahrain Business Incubator Center offers in-wall incubation services for the selected projects requiring basic infrastructure services offered by the BI (Hussein, 2007). While in Dubai, Mohammed Bin Rashid Establishment for SME Development (2011) aims to foster the development of a flourishing entrepreneurial culture and a competitive small and medium enterprises (SMEs) sector to support Dubai's economic development goals. This initiative tackles, among other challenges, the spiritual support needed by an Emirati entrepreneur especially among females (Kargwell, 2012). Besides, the impact of this initiative exceeds to expatriates (Tong, McCrohan, & Erogul, 2012). Those challenges are more or less facing entrepreneurs in Oman (Al-Shanfari, 2012). They vary between perception of the business environment, the possession of characteristics necessary to start a business, awareness of business opportunities and access to social networks and willingness to risk to starting a business. In Qatar, the overall status is a bit better, Qatar Foundation (QF) aims to prepare the people of Qatar to meet these challenges. QF offers SMEs a range of innovative venues for education, scientific and community purposes. Through its incubation arm the Qatar Science & Technology Park (QSTP), it attracts companies and entrepreneurs from around the world to develop and commercialize their technology in Qatar (Qatar Foundation, 2003).

Business incubation within the Saudi national context

The private sector accounts for over 85% of total employment in Saudi Arabia. SMEs represent 93% of the total enterprises in Saudi Arabia (Skoko, Al-Fawzan, Khorsheed, Wright, & Al-Sakran, 2009). They contribute 28% of the national Gross Domestic Product (GDP). SMEs employ anywhere between 10 and 100 employees each. SMEs play an important role in employment growth and private sector development. Studies reveal that Saudi SME entrepreneurs face several challenges while starting new business including a lack of experience in enterprise development and management, absence of risk capital investment, lack of integrated business development services and difficulty in access to the market.

In Saudi Arabia, commercial Bis are still in their infancy (Skoko et al., 2009). There are only limited private BI service providers, based in Riyadh and Jeddah, which offer fee-based business assistance to aspiring entrepreneurs. Most private Saudi Arabia BIs do not provide all the services necessary for a BI, thereby requiring the entrepreneur to seek assistance from multiple providers. They lack clear understanding of technology-based enterprises amongst the service providers as most of them are in the conceptual phase.

To tackle these obstacles, Saudi Arabia launched a novel national technology BI managed by the King Abdulaziz City for Science and Technology (KACST). The goal for this program is to encourage, facilitate, and support the establishment and development of sustainable technology incubator industries in Saudi Arabia.

The following sections describe the steps Saudi Arabia has taken to create the national level policy formulating organizational bodies to implement the policies and creation of BADIR incubator programs, and assessing their achievements thus far.

SETTING UP BUSINESS INCUBATION AS AN INDUSTRY IN SAUDI ARABIA

In July 2002, the Council of Ministers in Saudi Arabia approved a national policy developed by KACST for science and technology, entitled 'The Comprehensive, Long-Term, National Science and Technology Policy. Figure 1 describes the organization structure under the policy plan. In brief, this policy plan accomplishes the following:

* Provides the framework for future publicly-supported BI efforts in Saudi Arabia

* Offers parameters and guidance that define the intended nature and objectives of prospective government-supported incubation activities

* Endeavors to ensure that the incubation efforts sponsored by the Kingdoms government are focused, effective, comprehensive, and relevant to the country's needs

* Establishes the future direction for science, technology, and innovation (STI) in Saudi Arabia and defines the role of KACST, universities, government, industry, and society at large.

[FIGURE 1 OMITTED]

This policy led to the National Plan for Science, Technology, and Innovation (NPSTI). A key element of the NPSTI is establishing programs to enhance the position of Saudi Arabia in the strategic technologies that are most important to the country. The policy also encompasses STI regulations, developing and diversifying financial support, human resources, strategic technologies, transfer and localization, R & D capabilities, and the administrative structures of STI institutions, and STI and society.

King Abdulaziz City for Science and Technology is also responsible for building the infrastructure needed for supporting scientific research on a national level, including management of research grants, setup of communication networks and science and technology databases, and conducting applied research. The TDC within KACST was established...

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