How Can We Make Incubators More Effective?

My earlier two posts (here and here) introduced the work of our Expert Committee on Entrepreneurship and Innovation, especially our Pyramidal model that is a guide to short- and longer-term actions to creativity and (job) creation.

Here, I’ll discuss how to upgrade the network of incubators that have sprung up across the country, as well as their links with our University system. After all, Universities are also incubators, of ideas! The incubator network, to my mind, is part of the so-called top layer of the pyramid, that is, the layer which encompasses activities that we felt would yield short-term results (competitions and prizes are part of this layer as well). The university network is more resilient to reform and change, with deep entrenched interests, so it is part of the middle layer where the country’s collective efforts will take longer to bear fruit. So, a point that this post also serves to develop is that layers themselves are interconnected and mutually reinforcing.


Let’s take incubators first. As in any new industry – the “industry” of incubation in this case – there has been “excess entry” that is, there are too many incubators while we figure out which models work, which management teams (who run incubators) are able to do so well, and so on. They are competing now, and should do so vigorously. Importantly, the ones that don’t make it should not be propped up by implicit or explicit subsidies from the government, nor by automatic budgetary outlays that are not predicated on performance. The experiences of the non-performers will be keenly watched by the survivors, and the latter will improve. Meanwhile, we should continue to expect and encourage new entry as newer models of incubation are brought in.  This continued entry and exit is a sign of dynamism at this stage.

I have much  experience with incubators, both by researching these in different countries – Chile, Colombia, Singapore, US, among others – as a member of the Harvard-MIT academic complex which is swarming with world-class incubators, and as a co-founder of one in Bangalore myself, Axilor. It’s a riveting and fun experience to be in an incubator, infused with energy from youth cascading in with new ideas daily. At Axilor, for example, we are pioneering a new approach to curating ventures rather than only (passively) waiting for teams to come to us with theirs.  For example, in healthcare, we recently brought together doctors, scientists, medical device professionals, caregivers, regulators, financiers, and academics to brainstorm concrete ideas that we will then fund to get started.

The point is that ours is just one concrete effort. Let the market and society judge whether our effort works. Ditto for others’ efforts. Of course, part of the Darwinian process I’m advocating here is a shift of resources to the better managed incubators that show glimmers of success, as well to the newer experiments, away from those that haven’t worked out. As long as the interventionist impulse of the state is kept out, I’m confident that incubation in India will come of age very shortly.

Incubators in India are inadequately connected, to just about anything. There are two obvious connections. First, they should be connected with each other, at least loosely, so as to share ideas. This is a bit of soft-infrastructure that our committee would have looked favorably on as it can augment the results of any single productive experiment. Yet, currently, each incubator has exiled itself to its own self-made silo.


The other obvious connection is to proximate sources of knowledge, the local universities. I have been surprised that even the incubators launched within India’s best universities lack connectivity even to their own academic resources.  Relatively few faculty are really involved, and relatively few students participate in incubation (though the latter aspect is changing); rather, the incubation that is underway is with outsiders seeking to leverage the physical facilities more than anything, and sometimes with alumni of the University. Nothing wrong with these constituents getting a leg-up in their efforts, but it sure seems that the lack of  linkages between new ventures on the one hand and faculty and research on the other is a colossal lost opportunity.

So, how can we fire up the universities more? This is what will take time, and we’re better off acknowledging it and working on it steadily. Professors should have more incentives to collaborate with would-be entrepreneurs. Students should receive credit in their coursework to give them the appropriate nudge in that direction. Since professors do not usually have adequate experience, the university should actively recruit mentors from industry to work in the incubators, perhaps in the evenings or weekends, or on a project basis. Including such mentors in this way will ultimately allow corporates to become part of the incubation ecosystem as well.

I’m sure the particular contours of what will work will vary widely from place to place. But it’s not encouraging that the efforts at many incubators so far seem to me, perhaps a bit unfairly, to be all about sourcing some money (from the government) and then documenting how it got spent, with relatively little attention on knowledge creation and deployment, or on metrics for output (rather than the input measure of money spent). If I’m tarring unfairly with a broad brush, well, that’s my point: we need to start having performance indicators so we can separate the wheat from the chaff.

Anyone who has visited Bangalore lately and contrasted it with what was going on there a decade ago (let alone when I was a high school student there in the mid-1980′s), will agree that, when it comes to incubation, entrepreneurship and knowledge creation, we’re on the cusp of something very exciting!


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