India might significantly lag behind the United States? business incubator movement, started by Massachusetts Institute of Technology (MIT) in 1930s, but compared to its neighbouring countries in Asia, we are far better, says Rajendra Jagdale, secretary-general of Indian STEP and Business Incubator Association (ISBA). Incubation in China is fully supported by the government whereas in India, it is more public-private partnership-driven. ?Be it the US, France, China or Korea, everywhere incubators are funded by the government. But in India?s case, the government doesn?t support us for a very long time and there is limited support,? he laments. His viewpoint: ?We can actually grow faster if there is more support from the government.? ISBA 2010 is claimed to be the largest-ever national level platform wherein all stakeholders involved in the promotion of technology based entrepreneurs are present. One of their biggest achievements is providing 10 companies, pre-selected by ISBA, a platform where these entrepreneurs present their business plans to investors and based on the strength of their ideas get eligible to receive funding for their businesses. Jagdale met up with Vikram Chaudhary to discuss incubation in India, why it is important and more. Excerpts:

Why is incubation important?

Incubation is the best vehicle for innovation, and incubation can play a significant role in achieving inclusive growth. There is much potential to be harnessed to bring new technologies to market and convert our young technopreneurs to become job creators instead of job seekers.

How do you convert young entrepreneurs from job seekers into job creators?

That?s the mission of business incubators?we catch technopreneurs or young entrepreneurs, especially from academia or R&D, and then we groom them. Financing is certainly important but more important than that is mentorship and handholding. And all our incubators do that job very religiously. We help them to set up a company or group, help them to register it, help them to make business plan, we give them access to finance, and we also give them a brand by promoting them. And once they start making money, once they start making profits, we ask them to exit. So the business incubator in itself doesn?t make much money, as it wants the new set-up to exit from its premises. The companies also by that time have caught hold of other bigger investors and so they move on. And the business incubators, by that time, are free to catch hold of other small entrepreneurs and the process repeats.

What is the role of business incubators in supporting innovation and business creation?

We have felt for a long time that there are a lot of small and big institutions in India that are doing a lot of research and development work, and some of that R&D is really good, as you can see from our country?s achievement in, say, space. So, there has to be a mechanism by which that research can go into its particular field, that is, it is commercialised. And that?s where business incubators step in, and as most of them are in the field of technology, we call these incubators technology business incubators (TBI).

How are business incubators differentiated? Are they based on size?

Not really. Business incubators are defined by sector. The reason is that most of the incubators are either attached to an educational institution or a research laboratory, and those institutions and labs bring in a certain amount of expertise with them. That?s why most of the TBIs are sector-specific, even though some of the incubators can have their presence across sectors, may be two, three or more, but generally they stick to one sector. Depending on the sector, the physical infrastructure of the incubator would be different. For instance, and ICT-based incubator would be much smaller because there is no huge infrastructure required for that. On the other hand, a biotechnology-based incubator can be large as it would require laboratories and a whole lot of other equipment support, which a start-up obviously cannot support.

How are business incubators spread across the country?

Most of the TBIs are based in South India, but they are not necessarily metro-centric. In fact, most of our incubators are not in the metros. The place of the incubator depends on where is the host institution. We have a lot of incubators in non-metro cities such as Vellore, Erode and Trichy. The placing or location of an incubator is not a very simple phenomenon. We cannot just decide that we will have incubators spread across the country or in areas where there are no incubators. Incubators have to be driven by a committed team of people, linked with industry, academia or educational institutions.

For a rural set up or for an SME, a business incubator can be of utmost advantage.

Where does India stand vis-?-vis developing and developed markets in the case of business incubators?

The entire business incubator movement, classically, had been started by Massachusetts Institute of Technology (MIT) in 1930s and then it was taken by Fredrick Terman to Stanford. So the way business incubators have evolved in the US is quite different, and compared to that we are a long way off, but if you look at our neighbouring countries, we are far better.

How about China?

China is very different from the point of view of incubation. We are more public-private partnership-driven whereas China is more public-driven. Incubators in China are really large and they are fully supported by the government. But frankly none of us exactly know what?s happening in China. Incubation models are different, whether in the US, France, China or Korea. Actually everywhere incubators are funded by the government. But in India?s case, it is slightly different. Government doesn?t support us for a very long time. There is a restricted period, 3-5 years, or in some cases it may be extended. But the fact remains that there is a limited support from the government, but then there is more participation from the host institution. So, in India most of the senior incubators depend least on funding and have become self-sufficient.

So it means that extra support from the government can cause pampering and slow down the growth of a business incubator?

Look at it from the other viewpoint; we can actually grow faster if there is more support from the government.

At the ISBA conferences, who are the major participants and what advantage do they derive out of such events?

ISBA conferences have witnessed participants and experts not only from India but also from more than 30 countries across the globe. The participants and experts include the who?s who of the Indian business incubation fraternity, incubatee companies, government agencies, financial institutions and leading industries.

Having an ISBA conference in itself is a big achievement. We began in 2004 and over these six years we have been achieving a lot. We have added a lot of value over these years. For instance, last year we decided to recognise the incubatees that have come out of the business incubators.

This year, ISBA has launched a venture capital fund amounting to Rs 55 crore, which will be made available to member incubatee companies and is to be managed by Science & Technology Park, Pune, where ISBA secretarial is located. The fund will be scaled to the level of around Rs 500 crore by next year. So, you see, we have been adding value and ?meaning? to this association.