European Business and Innovation

Centre Network [EBN] EC-BIC Observatory 2013© and the Last 3-Year Trends

Copyright EBN – June 2013

An overview of the key facts and figures of the innovation-based incubation industry in Europe 2010 – 2012

Contents Introduction..................................................................................................3 BICs’ Key Performance Indicators....................................................7 The deal-flow..................................................................................... 7 Job creation.......................................................................................9 Intellectual Property.................................................................... 10 Access to finance.............................................................................11 Survival Rates.................................................................................. 12 BICs’ Value for Money...........................................................................14 Investment per job created...................................................... 14 Performance per € 100K expenditure and per FTE member of staff..................................................14 Profiling a BIC............................................................................................16 BICs’ Business Model................................................................... 16 Income........................................................................................... 16 Expenditures.............................................................................. 18 Human resources........................................................................... 19 The core BICs’ services............................................................... 21 Creation Services..................................................................... 21 Training......................................................................................... 22 Development Services.......................................................... 23 Financial services.................................................................... 24 BICs’ ownership............................................................................. 24 Conclusions................................................................................................ 26 Figures and Tables................................................................................. 28 Credits........................................................................................................... 29

Introduction This report covers the three year period spanning from 2010 to 2012, and examines the key figures, in terms of performance and value for money of the EC-BIC community. But before immerging ourselves in the analysis, a few introductory paragraphs are needed to refresh our memories about the BIC concept and to see what has happened in the community at large in these past years. A European Commission Business and Innovation Center (an EC-BIC, or simply a BIC), is an organization that supports the creation of innovative companies, supports the development of innovation in the existing SMEs and strives to create an environment where innovation can be better bred and fed. Of course it is not an easy task, as it implies technical knowledge of the highest quality, a sound understanding of the economic, social and political dynamics within the catchment areas, and a great degree of sensitivity while contributing to shaping the entrepreneurial trajectory of people. Innovation in EBN is defined as “a change that creates and/or adds value, and provides a competitive advantage HERE and NOW”1. A very wide definition that leaves, in the end, to the BICs the capability and the flexibility to assess what is actually innovative in the catchment area they serve. As can be seen in figure 1, in the EBN community, innovation is not a merely technological instance. Non-tech innovation is occupying one third of the EC-BICs expertise, and this proportion has been growing over the years.

1 E  uropean Commission, DG Regional Policy and DG Enterprise and Industry, The Smart Guide to Innovation-Based Incubators”, February 2010

3

Figure 1: typology of innovation in the EBN network

There are many innovation-based incubators in the EU, but only some of them are EC-BIC accredited. What makes the BICs so special? What differentiates the EC-BICs from the rest of the incubators is that they have chosen to undergo a quality screening of their internal organization and of their performance. They have chosen to comply with the BIC Quality Mark Criteria and they have chosen to use the EBN quality system to focus on continuous improvement through a rigorous benchmarking approach. This is what it means to be part of the EBN community of EC-BICs, where you can access a sophisticated and unique quality assessment service which works through the comparison of many indicators specific to the incubation industry and through the search and transfer of good practices within the network. Each year, every BIC proceeds to fill in the online self-assessment questionnaire, with over 160 questions spanning from its profiling to its organization, from the services delivered to the key performance indicators. The data, collected and validated by the EBN quality team, is then used in various ways. It is used for an initial assessment of the compliance of each organization with the BIC Quality Mark Criteria, it is used to create individual BIC benchmarking reports and it is used to create the yearly BIC observatories (at regional, national and European levels), such as the one you are now holding in your hands.

This year, however, we decided to do it a bit differently. Indeed, instead of providing a photograph of a single year (2012), we provide insights on what has happened in the last 3 years (2010-2012), and we will see if there are some countries where BICs contribute differently to the overall performance of the network. Looking back at the last three years of EBN’s full membership (the EC-BICs), there is one general trend that needs to be highlighted: the increasing interest towards the EC-BIC criteria and the label itself across EU27. Moreover, there has been a growth in the network outside of the boundaries of the European Union. Organizations have been labelled in the Middle East and in North Africa, (Lebanon, Jordan, Palestine, Tunisia), in the Russian Federation (Kazan, Krasnoyarsk), in Taiwan (Hsinchu City, Taichung), in the Balkans (Bosnia and Herzegovina). More accreditations are foreseen in the future in these countries (as there is a will to build country networks of BICs) and other countries are expressing interest. This shouldn’t be a surprise, as all the world is going global, enterprises are more and more internationalizing, and more and more one of the core functions of a BIC is to support internationalization processes. The accredited BICs aim at supporting their clients to reach global markets through trusted partners, in partnership with similar organizations who have been quality assessed as well as through other BICs. The data used to compile this report has been collected through the on-line self-assessment questionnaire (available at http://quality.ebn.be). Each questionnaire has been then validated by the EBN Quality Team. The samples of BICs on which all calculations were made are highlighted in table 1. All means have been calculated after removing the highest and lowest two values of every series.

Number of BIC surveyed

Percentage over total population

2010

133

86,5%

2011

142

90%

2012

126

84%

Table 1: number of surveyed BICs per year

All national observatories, to which this report refers, are available online at the EBN website (www.ebn.eu).

5

A TYPICAL BUSINESS & INNOVATION CENTER

www.ebn.eu

PUBLIC

€0

DEAL FLOW 263

enquiries

79 feasibility studies 44 business plans 28

100%

57 NEW JOBS IN START-UPS

PRIVATE

40%

Client Survival Rate after 3 years

BIC

OTHER

88%

61%

0%

20 companies ready for investment

start-ups

Energy environment Business services

ICT

60%

EXPENSES

€1.5M

INCOME

4,700m2

There are around 150 qualified EC-BICs in 40 countries contributing to wealth and job creation through the support of innovative start-ups and SMEs. This is the typical BIC.

14 STAFF

Inforgraphy based on 2013 survey

BIC

€1,650,000 INVESTMENT RAISED

Engineering

CLIENT SECTORS

Life sciences

SOURCES OF FUNDING Venture Capital

Seed Funding

Business Angels

Other

Others

26% 18% 21%

36%

79 9 SMEs supported d

BICs’ Key Performance Indicators The deal-flow On average a BIC, in 2012 has converted 263 enquiries for enterprise creation into 28 startups (with a conversion rate of 10.6%), passing through 79 feasibility studies and supporting the preparation of 44 business plans.

Figure 2: the 2012 deal-flow

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There is always a serious selection process occurring to identify the entrepreneurs that can actually access the various incubation programme. In 2012 the conversion rate has increased with respect to the previous 2 years, but not because of an increased number of final start-ups created, which remains rather constant, but because fewer people have actually contacted the BICs for start-up creation support (see figure 3).

Figure 3: 2010, 2011 and 2012 deal-flows compared

The reason for the decrease in the number of enquiries for enterprise creation is not straightforward as the BICs have steadily increased the number of awareness raising events organized (from 25 to 28 on average) over the last three years, and there has also been an increase in the number of participants to these events (from 989 in 2011 to 1115 in 2012). The BICs therefore have been increasingly implementing actions to raise awareness, but this was not followed by an increased number on the top of the funnel of the innovation-based support service chain. The current economic uncertainties in Europe might be one of the explanations of having measured fewer new individual start-up initiatives.

Figure 4: average number of awareness-raising events organized by the BICs

The Spanish, French and Italian BICs are those who reached-out more in their territories, with an average of respectively 1247, 565 and 465 enquiries for enterprise creation. The countries with the highest conversion rate (from enquiry to start-up) are Germany (47%), United Kingdom (14.5%), Portugal (12.8%) and Belgium (11.7%). Indeed the German BICs report having been contacted just by 55 potential entrepreneurs on average, but nonetheless supporting the creation of 26 start-ups, therefore showing the highest conversion rate of the overall network.

Job creation The average BIC in 2012 was staffed by 14 team members who have facilitated the creation of 57 new jobs in the aforementioned 28 start-ups and have supported the development of 79 existing SMEs facilitating the creation of another 42 jobs. These figures show a slight decrease in 2012 when compared to the previous years, especially when it comes to jobs created in existing SMEs.

Figure 5: average number of SMEs supported by BICs

The decrease of the SMEs supported with respect to the year 2012 can be explained also through the decrease of the overall financial resources available to the BICs which passed on average from € 1,551,623 to € 1,450,900. This variation of -6.9% has more heavily influenced this performance indicator rather than the deal-flow of start-up creation.

9

Figure 6: average number of jobs created in start-ups and SMEs

The Spanish and the German BICs are those having a higher impact with regards to jobs created in new start-ups (averaging respectively 214 and 198 jobs created per BIC), followed by the Italian (50.4) and Irish BICs (46). UK, Spanish and French BICs have been those with higher impacts in terms of job creation within the existing SMEs averaging respectively 63.8, 49.6 and 41.1 jobs created per BIC.

Intellectual Property In terms of intellectual property, since 2010 there has been an upward shift in the numbers of SMEs supported balanced by a downward shift of start-ups supported. On the other hand, when it comes to view the numbers of patents requested and patents granted, the averages show that the level of performance remain more or less steady over the three years.

Figure 7: IP issues support indicators

Portugal is the country whose BICs have on average supported the greatest number of start-ups with IP issues with an average of 42.2, followed by the Finnish BICs (12.8) and the UK (9.1). When it comes to the support on property rights to existing SMEs we find that again Portuguese BICs take the lead with an average of 23.6 SMEs supported, followed by France (19) and Belgium (8.3). Although Portugal is leading in terms of number of SMEs and start-ups supported, it is below average in terms of patents requested and granted to entrepreneurs. Finland holds the first place when it comes to these performance indicators with an average number of 9.5 patents requested and of 5.8 of patents granted, followed by Spain (5 and 2.2) and France (4.4 and 3.1).

Access to finance Each BIC on average has made ready for investment 9.8 start-up entrepreneurs and 8.8 SMEs. We record a slight decrease in both indicators in 2012 compared to the 2 previous years.

Figure 8: number of Start-ups and SMEs made ready for investment

Concerning SMEs, the three countries who hit the higher scores in terms of supporting investment readiness through training and mentoring are Spain, with an average of 20.8, Ireland (17) and Belgium (15.6), whereas considering new start-up entrepreneurs we record the Irish BICs, with an average of 23.8, followed by UK (20.1) and Spain (14.4). The total amount of funding raised for client companies coached by the BICs has dramatically increased globally in 2012 where it reached an estimated amount of € 395 M. This represents an increase of 26% with respect to the year 2011.

11

While business angel funding has decreased, there has been an increase in the access to seed funds and venture capital compared to the 2011 data. The “other” component, which mainly represents governmental grants, has decreased sensibly, although remains still higher than the 2010 levels.

Figure 9: funding raised for client companies

The most active BICs in raising venture capital funding have been the German ones with an average of over € 1.5m and the French ones (€787,000), while the Irish BICs have been the most performing in raising early stage funding. Indeed over € 6.5 M euros have been raised on average by the Irish BICs, (over € 4 M from business angels and € 2.6 M of seed capital).

Survival Rates Also this year we can state that a company that has been sustained by a BIC has a higher chance of survival and success.

Figure 10: enterprise survival rates

The European Union, in the 2009 document “Business Demography: employment and survival”2, which is built around the Eurostat database, reports an average survival rate of approximately 67% after three years as opposed to the 88.3% survival rate reported by the BICs for 2012. The National Business Incubator Association (NBIA) in the recent study “2012 State of the Business Incubation Industry” reports that companies supported by business incubators in the United States have a survival rate of 87%. This means that a company who passes the really tough selection process deployed by the BICs after the enquiry phase, has approximately 20% more chance of surviving after its third year of operations. This spread is a true indicator of the value of the start-up support service chain which takes place within incubators and confirms that a tough initial selection is key for a successful incubation program. Nevertheless the survival rate has experienced a slight reduction (down 2.4%).

2 E  urostat – statistics in focus 70/2009 - “Business Demography: employment and survival” http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-09-070/EN/KS-SF-09-070-EN.PDF (2 May 2013)

13

BICs’ Value for Money Investment per job created The cost for creating a job through the BICs’ system has remained steady over the past 3 years as can be seen in figure 11, while there has been a sensible decrease of public financial contribution per job created (variation of -13.8%). As 2012 has been a rough year for the stability of some EU countries, it may be interesting to see what happened in terms of investment of the public sectors within these countries. In Italy the cost per job created is over € 38,000 with a public sector investment which represents 68% of the total cost. In Spain instead the cost per job created is much lower (€ 4,900), but the public financial contribution has been similar (66% of the total cost). In Portugal the public sector investment represented 68% of the € 22,800 necessary to create a job. On the other side, in Germany this proportion has a value of 23%. Not considering absolute values, it can be stated that BICs are associated to higher investments in the countries where the current economic crisis is striking the hardest. Anyway a lower value of public sector investment per job created is the result of the overall decrease of public funding (as reported in figure 16).

Figure 11: investment per job created

Performance per € 100K expenditure and per FTE3 member of staff In 2012, with € 100,000 a BIC has supported the creation of 2.53 start-ups, assisted 5.45 SMEs, created 8.65 jobs and facilitated the elaboration of 3 business plans. Furthermore each FTE staff member has supported the creation of 2 start-ups, assisted 5.6 SMEs and facilitated the creation of 7.14 jobs and supported the creation of 3.16 business plans. These are average peformances.

3 Full Time Equivalent

Furthermore, at country level the following can be stated: 1. Spanish BICs have been the most cost-efficient as they report being above network average in all indicators especially when it comes to support to start-up created (7.77 start-ups supported with €100K of expenditure and 6.81 per FTE staff member) and job creation (20.34 jobs with € 100K of BIC expenditure and 17.83 per FTE staff member). 2. G  erman BICs appear to be very efficient in job creation as well (21.83 job per € 100K of BIC expenditure and 37.48 jobs per FTE staff member). 3. Italian BICs have invested heavily in pre-incubation activities as the efficiency indicators report 3.78 business plans created per € 100K of BIC expenditures and 3.74 business plans per FTE staff member. 4. On the contrary, UK BICs show more efficiency when dealing with existing SMEs with 14.18 SMEs assisted with € 100K of BIC expenditure and 17 SME supported per FTE staff member.

Figure 12: KPIs per 100K Euros of BIC expenditure

Figure 13: KPIs per FTE member of staff

15

Profiling a BIC BICs’ Business Model Income As can be seen in figure 14, and as already stated above, there has been an overall decrease of the income of a BIC in 2012. This variation of 6.9% is mainly due to a decrease of the public sector income. Moreover there has been an increase in the private sector income, but this has not been enough to balance off the total income. Figure 15 and figure 16 show the variation breakdown of respectively the public and the private income.

Figure 14: average total income of BICs

€ 294.537

€ 296.070 € 362.706

Figure 15: private sector income

Figure 16: public sector income

What really stands out within the analysis of the public sector income is the decrease of the public income through national and regional programmes. A negative variation of 84.9% is definitely a strong variation, which says much about the current availability of funding special projects for innovation-based incubators. This may very well negatively impact the capacity of the industry itself to launch new tests and pilot initiatives finding out new solutions for the entrepreneurial communities.

17

EBN is putting efforts in trying to convince public sector decision-makers (at local, regional, national and European levels) not to decrease the investments in the BICs, as the effect of the BICs is to create sustainable and growing firms with an excellent efficiency. This was the purpose of the EBN annual policy event held in Brussels in March 2013. Concerning private sector income, there has been a large increase in the income coming from housing and incubator services. This +18.8% variation, although not enough to balance the decrease of public sector income, is an encouraging figure, as it may produce higher robustness and independence in the next future as BICs may need to face increased market challenges as they face markets. Furthermore the decrease in the income coming from services to existing SMEs is a reflection of the decreased performance of this group, and of the difficulty to sell “paying services” to SMEs.

Expenditure In general the BICs have decreased their expenditure. This has been a constant trend since 2010. Indeed there has been a variation of -9.5% during the last three years. Costs for human resources, payroll and consultancy fees, have been reduced respectively 2.9% and 5.3%, but the sharpest reductions have taken place within the overheads (-21.5% variation). This shows the capacity of the BICs of running their organizations without heavy reductions of workforce. A BIC’s main capital has always been the human one, and this still remains the case. This statement is corroborated also by the decreased cost of the incubator buildings (-14% of what they cost 3 years ago), and their flexibility when confronted to negative variations of public sector income.

Figure 17: average BIC expenditures

Human resources On average a BIC in the EBN network was staffed with 13.25 people, representing a slight decrease with compared to 2010. Figure 18 reports the breakdown of the staff by role and it shows no real significant changes occurring over the three years. The UK BICs are those who report having the highest number of staff (with over 27), and those also reporting a higher number of staff in absolute figures involved in entrepreneurs guidance and support functions. In relative terms Spanish BICs tend to employ more staff involved in such functions (5.07 staff members with entrepreneurship support functions on approximately 15 staff members in total).

General Management

Administration

Entrepreneurs guidance and support

EU/National/Regional Project management

incubator management

communication, events, animation

Training entrepreneurs

other

Figure 18: breakdown of staff by roles

Overall, from a simple linear regression on the 2012 data, it can be seen that there is a positive relation between the number of staff involved in support functions and the number of start-ups (with a correlation index equal to 0.49).

19

Figure 19: linear trend-line start-ups created-staff supporting start-ups

The use of external consultants has not changed sensibly over the last 3 years, where over 50% of the BICs report using fewer than 50 man/days per year. French, Irish and Portuguese BICs are the ones who have internalized most functions as they report a lower number of man/ days of external consultancies used, whereas Belgium, Italy and UK, are the countries where external expertise is more sought after.

Figure 20: number of man/days of external consultancies

The core BICs’ services Creation Services The capacity of the BICs to deliver services to new potential entrepreneurs (creation services) and to existing SMEs (development services) has in general slightly increased over the last years. All BICs have reported implementing creation services where they have sensibly increased their capacity to assess training needs and to deliver training and have been more active in renting incubation space.

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Figure 21: services for start-up creation

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Belgian, Portuguese and Italian BICs are those who have invested more heavily in providing A'H4)0$Y"D%(,545'2'"0$3">,0H)0$"A>=2"0('",-%2'"*-%"-0&'")$&'2,'3"E%('"-'0&)H/")$"9(%&)3)$4"+)$0$1)0H" financial planning support, while0$3" Czech and Spanish BICs haveE%('" contributed more increasing 9H0$$)$4" 2599%(,Y" *-)H'" =\'1-" L90$)2-" A>=2" -0&'" 1%$,()75,'3" %$" )$1('02)$4" ,-'"to ,(0)$)$4" the training capabilities of the overall EBN network. Italian BICs are those who concentrate 10907)H),)'2"%+",-'"%&'(0HH"8A_"$',*%(.?">,0H)0$"A>=2"0('",-%2'"*-%"1%$1'$,(0,'"E%('"-'0&)H/"%$",-'" more 9('6)$1570,)%$"2,04'2"Z02"0H2%"3'E%$2,(0,'3"7/",-'"&0H5'"+%("E%$'/")$3)10,%(2"'R9('22'3"07%&'[?" heavily on the pre-incubation stages (as also demonstrated by the value for money indicators expressed above). D-/2)10H" )$1570,)%$Y" 0H,-%54-" $%," 0" 9()%(),/" 2'(&)1'" %+" ,-'" A>=2Y" ('E0)$2" -)4-" )$" ,-'" 04'$30?" #$" Physical incubation, although a priorityTYF;;" service BICs,2901'" remains high in the agenda. 0&'(04'" A>=" )$" :;!:" E0$04'2"not 099(%R)E0,'H/" L^?E?"of %+"the )$1570,%(" )$1570,)$4" 1%E90$)'2" An average BIC in 2012 manages approximately 4,600 Sq.m. of incubator space incubating *),-"0$"0&'(04'"%11590$1/"(0,'"%+"IFi?"" companies with an average occupancy rate of 76%. B2C9D./E?2$;17FEC1;$ GF17.A1$E2C9D./E?2$/EH1$IJ1.7;K$ Incubation services GF17.A1$?CC9:.2CL$7./1$I#K$ Average incubation time (Years) E2F.&'I)',3+;":2.'"0:$F2*"-0'

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&)")$-./.$

&)""$-./.$

&)"&$-./.$

2010 Data

:?@F"

:?XT" 2011 Data

2.36

$h0"

2.54II?I:"

IF?;X" 2.71

77.72

76.05

n/a

:?I!"Data 2012

"

Table 2: physical incubation

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21

Training Training entrepreneurs is a consistent part of the work of a BIC, a part that has been steadily growing over the last three years. As can be seen in figure 22, the number of training sessions and the number of attendees has grown. A variation of +23% in the number of attendees is quite a significant increase, showing the existence of a real need to service and can be explained by the fact that combined “training & coaching” modules are becoming more systematic.

Figure 22: number of training sessions and number od attendees

Figure 23 tells us that more BICs have prepared themselves to support entrepreneurs, building training sessions on business planning, management and IP issues.

Figure 23: percentage of BICs delivering trainings per topic

Development Services Within the development services sphere a sensible increase is reported also when it comes to training existing SMEs. Czech, Irish, Spanish and UK BICs seem to be those who are delivering the most comprehensive set of services to this target group. Other SME development services have remained constant.

Figure 24: services to existing SMEs

Figure 25 confirms the general decreasing trend, corroborated by the lower number of SMEs supported in 2012. Access to finance seems to be the only service which on average has remained constant in terms of SMEs supported per BIC.

Figure 25: average number of development services deployed

23

Financial services O=5-5=2"-02")$1('02'3"),2"H'&'H"%+"1%$$'1,)%$"*),-",-'"&'$,5('"109),0H")$352,(/?"N'(/"+'*" 14, the community of BICs has increased its level of connection with the venture capital industry. few BICs +(%E" provide own resources, for example, by taking,-'/" equities A>=2"Very 9(%&)3'" +5$3)$4" %*$"funding ('2%5(1'2Y"from +%(" 'R0E9H'Y" 7/" ,0.)$4" '^5),)'2" )$" ,-'" 1%E90$)'2" in the)$1570,'?" companies they('02%$2" incubate. The reasons for this are that often G-'" E0)$" +%(" ,-)2" 0('"main ,-0," %+,'$" 957H)16%()'$,'3" %*$'(2-)9" E%3'H2"public-oriented ('$3'(" ,-)2" ownership models incompatible (as it can potentially trigger of +'0(" interest) )$1%E90,)7H'" Z02"render )," 10$" this 9%,'$,)0HH/" ,()44'(" 1%$+H)1,2" %+" )$,'('2,[" 0$3" ,-0," A>=" conflicts 9(01,),)%$'(2" and that BIC practitioners fear possible interference in the incubatee/incubator relation. 9%22)7H'")$,'(+'('$1'")$",-'")$1570,''h)$1570,%("('H0,)%$?" :;!;"W0,0" :;!!"W0,0" D0(n1)90n%$",%"D57H)1" S)$0$1)$4"D(%4(0EE'2"h" D(%P'1,2" !;;i"

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9'(1'$,04'" %+" 957H)1" %*$'(2-)9" -02" 9022'3" +(%E" I!i" ,%" IFiY" *),-" 0$" '^5)&0H'$," ('351,)%$" %+" From 9()&0,'"2'1,%("%*$'(2-)9"0$3"('9('2'$,0,)%$?"G-'"('351,)%$"%+",-'"9()&0,'"2'1,%(")2"E%2,H/"1052'3"7/" 2010 to 2012 the public sector has increasingly gained more ownership of the BICs, and 0"('351,)%$")$",-'"$5E7'("%+"'$,'(9()2'2")$&%H&'3")$",-'"A>=2?" consequently increased their voting rights percentage within the BICs’ governing bodies. Indeed the percentage of public ownership has passed from 71% to 76%, with an equivalent #2" 2,0,'3" 7'+%('" ,-'" )$&'2,E'$," %+" ,-'" 957H)1" 2'1,%(" -02" 3'1('02'3" ^5),'" 2'$2)7H/?" G-'" 752)$'22" reduction of private sector ownership and representation. The reduction of the private sector E%3'H"-02"2H)4-,H/"E%&'3"+0&%5()$4"E%('"9()&0,'"+5$3)$4?"G-)2")2"$%,"('+H'1,'3")$"0"1-0$4'",%*0(32"0" is mostly caused by a reduction in the number of enterprises involved in the BICs. E%('" 9()&0,'6%()'$,'3" %*$'(2-)9" E%3'HY" 0H,-%54-Y" )," E0/" 7'" ,-'" ,)E'" ,%" ,-)$." 3)++'('$,H/Y" 02" ,-'" 957H)1" before 2'1,%(" )2"the 2-%*)$4" 2%E'" 3'4(''" %+" &)21%2),/" )$" 95(25)$4" 2,(0,'4)'2" +%(" A>=2B" The As stated investment of the public sector has252,0)$07H'" decreased quite sensibly.

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business model has slightly moved favouring more private funding. This is not reflected in a change towards a more private-oriented ownership model, although, it may be the time to think differently, as the public sector is showing some degree of viscosity in pursuing sustainable strategies for BICs’ scalability, a strategy which may have more chances of success if the private sector would be more involved.

Figure 27: public sector ownership structure

Figure 28: private sector ownership structure

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Conclusions By Philippe Vanrie Things are changing. The BICs are changing. The BICs are innovating, adjusting to the mutating environment, where public resources are decreasing and new sources of income need to be found, together with new and more efficient ways to support new venture creators, as well as those entrepreneurs who are ready for a quick acceleration. New methodologies, new processes and new tools. If the mission is not changing, the way the mission is pursued is changing drastically. End-users testing is upfront with the growth of Living Labs, professional interaction is booming through the establishment of coworking spaces, new risk-assessment tools, business model generation apps, benchmarking services, are there to increase the volume and the quality of services delivered by a BIC. For a BIC these represent opportunities, some more interesting than others, to stay ahead of times, and to not miss out on whatever will be the next big thing. The data presented in this report shows that 2012 has been a solid year in terms of results, but also a difficult year in terms of resources, and it highlights that the response of the BICs when facing difficult times is to increase their own efficiency. The BICs have demonstrated a capability to adapt themselves and to be flexible and smart enough to efficiently play their role under changing circumstances, while retaining specific elements which will make sure they will still fulfil their mission. The framework is provided by the BIC quality mark criteria which have been established maximising the experience gained by the BICs over 28 years. The EC-BIC trademark is no joke. It provides the security that BICs are innovation-based incubators that work in a wellorganized, serious way with an approach which looks at continuous improvement, with an eye towards the outside world, seeking what is relevant and efficient and what can be transferred as a useful practice. This is about trust-building, as reputation goes a long way, but it does need to be earned and retained over time. The EC-BIC label is just a starting point.

The benchmarking approach we have developed recently, is composed of two parts, one dedicated to networking, culminates with the transfer of the best practices in the network and the other is the benchmarking service developed through the EC-BIC data. The first component is one of the core businesses of EBN, and is the main reason why we have been in the last three years testing and organizing our technical event, our fall/winter event. Indeed the first two Tools Exchange Forums were held in Berlin and London with the aim of transferring to our network the most recent innovations in the start-up creation and SME development support service chains and have become an annual appointment, fixed in our yearly agendas. I am convinced that the two sides of the benchmarking approach developed in EBN may help, in the near future, to push things forward, looking after better results with improved efficiency. Even in difficult times, the BIC concept is a robust and efficient (re)generator of local economies, especially when the BICs benefit from the pan-European networking effect, and particularly when the arguments for efficiency are evidence-based!

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Figures and Tables Figure 1: typology of innovation in the EBN network............................................................................ 4 Figure 2: the 2012 deal-flow............................................................................................................................ 7 Figure 3: 2010, 2011 and 2012 deal-flows compared.............................................................................. 8 Figure 4: average number of awareness-raising events organized by the BICs.......................... 8 Figure 5: average number of SMEs supported by BICs........................................................................ 9 Figure 6: average number of jobs created in start-ups and SMEs.................................................. 10 Figure 7: IP issues support indicators........................................................................................................ 10 Figure 8: number of Start-ups and SMEs made ready for investment............................................11 Figure 9: funding raised for client companies.........................................................................................12 Figure 10: enterprise survival rates..............................................................................................................13 Figure 11: investment per job created..........................................................................................................14 Figure 12: KPIs per 100K Euros of BIC expenditure...............................................................................15 Figure 13: KPIs per FTE member of staff...................................................................................................15 Figure 14: average total income of BICs.....................................................................................................16 Figure 15: private sector income...................................................................................................................17 Figure 16: public sector income.....................................................................................................................17 Figure 17: average BIC expenditures...........................................................................................................18 Figure 18: breakdown of staff by roles........................................................................................................19 Figure 19: linear trend-line start-ups created-staff supporting start-ups................................... 20 Figure 20: number of man/days of external consultancies.............................................................. 20 Figure 21: services for start-up creation.....................................................................................................21 Figure 22: number of training sessions and number od attendees................................................22 Figure 23: percentage of BICs delivering trainings per topic...........................................................22 Figure 24: services to existing SMEs..........................................................................................................23 Figure 25: average number of development services deployed.....................................................23 Figure 26: percentage of BICs providing financial services per type............................................24 Figure 27: public sector ownership structure.........................................................................................25 Figure 28: private sector ownership structure.......................................................................................25 Table 1: number of surveyed BICs per year................................................................................................ 5 Table 2: physical incubation............................................................................................................................21

CREDITS Authors Giordano Dichter, European BIC Network ([email protected]) Head of Quality and Technical Assistance at the European BIC Network. He is passionate about incubation and innovation and always seeks ways to introduce the latter in the former.

David Tee, Incubation Worldwide ([email protected]) Senior Consultant for Quality and Technical Assistance at EBN and publisher of “The Business Incubator Magazine”. He believes that supporting entrepreneurs is the best way to create wealth for an economy and jobs for its citizens.

Philippe Vanrie, European BIC Network ([email protected]) CEO of the European BIC Network. A working life spent to vouch for the BICs and innovation-based incubation all across Europe and beyond.

Special thanks to Valerio Leonardi, Quality Assistant, the young talent behind data collection. All the BICs who participated in the 2011, 2012 and 2013 surveys for their long-time commitment to the quality process!

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THE EBN ORGANISATION: A PLATFORM FOR INSPIRATION, SERVICES AND OPPORTUNITIES! EBN is a Brussels-based team delivering a full range of services, which includes a comprehensive set of accreditation & networking services to the BICs, as well as the deployment and coordination of EC-projects in relevant areas. EBN membership services are available upon the payment of an annual membership fee, and are classified in 5 categories:

Policy support & EU representation: policy watch, tender watch, position papers, public sector visibility, participation to consultations & working groups Quality & technical assistance services: accreditation, benchmarking & statistics, case-studies, feasibility studies & on-site consultancy, study tours Networking activities & events: annual congress, conferences, workshops, thematic working groups/sub-networks, strategic partnerships Projects & thematic networking development: partner search, bid writing, contract/project coordination, EC-projects dissemination, guidance, training Promotion activities: websites, newsletters, publications, public relations, media support EBN’s professional and integrated platform of services contributes to the rapid growth of the BICs’ industry, in quality and in quantity, across Europe, and beyond. This expertise is recognized as unique by both public and private sectors, at international national, regional and local levels.

NOTEPAD

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European BIC Network Avenue de Tervueren 168 – bte 25 B-1150 Brussels Phone: +32 2 772 89 00 Fax: +32 2 772 95 74 E-mail: [email protected]