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Changes to boost startup incubation and networks

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This article was published on 8 April 2019

Callaghan Innovation’s Technology Incubator and Founder Incubator programmes have  been reviewed recently by the Ministry of Business, Innovation and Employment (MBIE).  Today MBIE announced some great news for New Zealand’s innovation ecosystem: support for both of these programmes will continue alongside some ambitious improvements.

See MBIE’s website for more details. 

Tech Incubator programme

After five years in pilot, the Tech Incubator programme will continue, within a more ambitious policy framework. Lessons  learned from the pilot will be converted into improvements to a refreshed programme that will provide world-class support to New Zealand start-ups. Briefly, they include:

  • requiring strong commercialisation experience and access to investment from incubation providers, inviting global expertise
  • stronger guidelines and metrics with a serious data focus
  • a higher repayable loan amount for new start-ups
  • a lower percentage of management fees providers can take under the programme
  • projects will also be encouraged to align with the Government’s wider priorities for an innovative and low-emissions economy and raising New Zealand’s levels of R&D.

Founder Incubator programme

The review was satisfied with the performance of the Founder Incubator programme which has been running since 2001. However, there are areas to explore for improvements. Briefly, they include: 

  • scope to support entrepreneurial capability with more flexibility. This includes support for some initiatives that would not be expected to deliver direct commercialisation outcomes
  • opportunities for better alignment with other initiatives (such as accelerators)
  • the level of funding for Founder Incubators is insufficient.

Over the coming 12 months we will work with MBIE to look at how we can address these areas.

See MBIE’s website for more details.

 

What now 

Services for start-ups will continue as normal. We will work with start-ups and incubators to answer any questions and deliver a world-class programme going forward. 

UPDATED RFP TIMELINE (May 2019)

Timing of this RFP release has been amended to coincide with Government Budget announcmenets at the end of May 2019. It will be open to current providers, as well as new local and international providers meeting the new ambitious criteria.

Date

Milestone

June 2019

Open new RFP

September 2019

Confirm successful providers

1 January 2020

New Tech and Founder Incubation contracts begin


FAQ - Refreshed Technology and Founder Incubator policies


See MBIE’s website for more details about the incubator reviews and subsequent policy changes. 

What is the purpose of Tech Incubators?
The Technology Incubator programme helps start-ups commercialise complex technology like biotech and aerospace technology - largely, research coming out of universities. These technologies are generally more expensive and take longer to commercialise, but when they do, have a significant potential for earning and job creation.


What are the outcomes of the Tech Incubator review?
The review noted some significant positive outcomes over the five-year pilot including producing 45 new start-ups, attracting more than $50 million in investments, and creating over 160 new tech jobs. However, as expected and as an outcome of MBIE’s review, there are improvements to be made for a more ambitious programme.


What changes will be made to the Tech Incubator programme?
We are working through the operational details, but the new ambitious policy direction includes, briefly:

  • requiring strong commercialisation experience and access to investment from incubation providers, inviting global expertise
  • stronger guidelines and metrics with a serious data focus
  • a higher repayable loan amount for new startups
  • a lower percentage of management fees providers can take under the programme.
  • projects will also be encouraged to align with the Government’s wider priorities for an innovative and low-emissions economy and raising New Zealand’s levels of R&D.

 

What is the purpose of Founder Incubators?
Founder Incubators are for people with great ideas. They provide services to help founders and their teams validate their ideas in the market and build a strong business around it. They help accelerate the path to market with concentrated, core business support and extensive networks for founders.


What are the outcomes of the Founder Incubator review?
The review was positive about the performance of the Founder Incubator programme, which has been running since 2001. However, it did note some areas to explore improvements.

 

What changes will be made to the Founder Incubation programme?
We are working through the operational details, but the suggested changes include, briefly: 

  • There is scope to support entrepreneurial capability with more flexibility, including support for some initiatives that would not be expected to deliver direct commercialisation outcomes
  • Opportunities for better alignment with other initiatives (such as accelerators)
  • The level of funding for Founder incubators is insufficient.

 

Where can I find more detail about the review itself?
MBIE has published some more information and background documents on its website. 


Who can apply to become a Founder or Technology Incubator?
Service providers that meet the new requirements are welcome to apply. That may include local, international and current providers. However, we will be assessing applications based on the new ambitious criteria. More information will be available when we launch the RFP at the end of April.


Will any changes impact services for start-ups?
We anticipate the resulting changes will be very beneficial to start-ups. As always, we will work with providers to ensure there is minimal impact on start-ups while we move toward the new incubation policy and contracts. 


Will the changes be applied retrospectively?
The contract changes will be implemented from January 2020, and are not retrospective. Those currently on the Tech Incubator programme will continue with the existing equity and repayable loan amounts.


What is the timeline for implementation?

The timing of this RFP release has been amended to coincide with Budget announcements at the end of May 2019. RFPs for 2020 incubation service providers will be open to current providers, as well as new local and international providers meeting the new ambitious criteria. 

Date

Milestone

June 2019

Open new RFP

September 2019

Confirm successful providers

1 January 2020

New Tech and Founder Incubation contracts begin