Third generation technology incubators cooking up better start-ups

New Zealand incubators are considered to be ahead of others in the world, according to the NZTE.

This post originally appeared on Sciblogs.co.nz.

Technology incubators have come a long way since 2000 when then-science minister Pete Hodgson said New Zealand needed something that replicated the highly successful Israel model.

We didn't have loads of emigrating Russian scientists, a highly developed military research or manufacturing infrastructure nor the wealth of the US east coast Jewish community to pump venture capital into new start ups.

But the nine incubators have shown themselves to provide a reasonable return on their investment, and even the Ministry of Economic Development hasn't been able to find a reason to shut them down.

There have also been a few other indicators that incubators in the New Zealand context are achieving positive outcomes for the country.

"We have a very good reputation for the way we're doing incubators," says NZ Trade & Enterprise manager of incubator development, Richard White.

"Partly that's seen in the intensity and quality of services that our incubation management provides."

The history of overseas incubators often starts from a 'real estate play'. An old building is converted to offices and start ups encouraged to use the shared services with their low rents. That's the first generation of incubation.

The second generation is when management is put into the mix to sit alongside the start ups.

The third generation is upping the intensity of that management and wrapping that around high quality entrepreneurs. This superior management helps provide access to capital and helps the entrepreneurs break into new domestic and international markets.

"New Zealand's considered to be ahead of others in the world," says White. "Part of the reason for that is because we're focused, small and have a good industry and government partnership. We don't have an us and them mentality and are working together on actual common goals."

Many overseas countries don't have the same incubator success, often having bureaucratic divisions across federal, state and local levels among other challenges.

New Zealand incubators have also picked up a couple of international gongs; showing an external validation that kiwis are keen on.

Auckland's Icehouse was recently named by Forbes.com as one of the world's top 10 technology incubators.

The Asian Association of Business Incubation also named Canterbury's powerHouse Ventures as its 2009 Asia Pacific incubator of the year.

Peter Kerr is a journalist, writer and consultant in the innovation space. View his work and that of 35 other scientists and science writers at Sciblogs, New Zealand's largest science blogging network.