Incubators foster multiple young companies at a time, gathering the brightest entrepreneurs under one roof, says Upendra Dharmadhikary, Vice President at Tech Mahindra looks.
Although we have a culture of innovation and entrepreneurial spirit, it’s a sobering thought that 50 per cent of start-ups in the UK fail within 5 years. Despite this, there were 600,000 new businesses setup in 2016 alone. With more start-up businesses setting up across the country, we need to ensure we nurture this new talent and innovation to prevent so many from failing. This is where business incubators can help. The primary objective of a business incubator is to foster successful and financially viable companies that can prosper on their own. Incubators are specifically designed to support start-ups, as well as creating an environment that tests their validity. A business incubator begins as a specialist community, then is later utilised as a network of contacts in the wider industry.
The number of technology start-ups in the UK is continuously growing, with many new businesses now established not only in London, but also in locations such as Milton Keynes and Cambridge. Despite this growth, new businesses in the technology industry are having to confront challenges such as a lack of access to funding opportunities, a lack of affordable collaborative centres, and limited opportunity to network outside of big cities. Consequently, many could benefit from the support of a business incubator, in order to prosper as a company and take the leap into the world of innovation.
We have recently launched our own incubator, Innovate MK, in Milton Keynes. Outside London, Milton Keynes has the largest density of business start-ups thanks to a large number of investors. As home to one of the UK’s Smart Cities, and having an aspiration to be a much greater tech-orientated city, Milton Keynes provides the perfect atmosphere for an incubator.
The Importance of Business Incubators
Nowadays, business incubators are considered important for many start-up companies, providing a structured environment that encourages a focus on the viability of their business idea, ensures growth, and nurtures success. Incubators provide a dynamic, collaborative workspace; immediate and long-term support; access to key networking events; as well as advisory boards and mentors. Through such initiatives, young businesses gain industry experience, access to specialist expertise, and core understanding of the available market opportunities.
Incubators foster multiple young companies at a time, gathering the brightest entrepreneurs under one roof. This bringing together of entrepreneurs and young businesses encourages the collaboration that makes incubators so appealing. Having multiple businesses under one roof not only fosters an entirely new network of specialists, but also allows resources, insight and talent to be pooled. The start-ups not only communicate with one another, learning from each and every new company or idea, but synergies are also created between the start-ups and the enterprise(s) mentoring them.
With larger, established enterprises supporting young start-ups, the benefits work both ways. A lack of bureaucracy in incubators and young businesses encourages increased innovation, allowing entrepreneurs to bring fresh ideas to life. Any success that stems from such innovation is shared and celebrated amongst associates, as well as recognised by supporting organisations. Developing a relationship with businesses already established in the industry allows entrepreneurs to leverage resources and take advantage of new technologies. Incubators open doors to professional and legal services, as well as financial assistance, that might not otherwise be available. These services are invaluable to start-ups as they provide an honest appraisal of their business as well as more specific feedback on the validity of their proposition. Not only are these services accessible, but they are also available much quicker as the incubator facilitates better communication between start-ups and sponsors.
By conversing with various start-ups, larger companies can network and build relationships with the next generation of talent. Through these relationships they can learn from new business mentality and passion, subsequently improving their own initiatives. In addition to support and the exchanging of ideas, there is also potential for a start-up and an established business to officially collaborate, resulting in new market opportunities. Incubators provide start-ups with a sales channel so they can really maximise their business ideas. Being first to market with new concepts and innovations will place technology vendors ahead of their competitors.
Start-ups receive advice on how to compete successfully with established industry players, as well as the opportunity to prove their worth to potential investors. It is vital the technology industry continues to support the relationships between new businesses and incubators, as any loss in momentum of the development and success of start-ups could result in some of the UK’s best entrepreneurial talent going to waste.