Final Documentation

Technology Business Incubation in Brazil, Lalkaka and Shaffer 1999

    Business incubators, evolving from experiences with other business development services, have the purpose of assisting the new venture creation process. Their numbers world-wide have increased from 200 a decade ago to about 2,500 today. Due to the significance of technological innovation and entrepreneurship in shaping the future, this paper looks at technology business incubation centers (which have common features with the 'innovation centers' in Europe) as a means of commercializing technologies and developing high value-added products, processes and services.
    The paper presents a case study of two Brazilian technology business incubation programs. The first of these is the Incubadora de Empresas de Base Tecnologica (Incubator of Technology-based Enterprises) in Belo Horizonte, Minas Gerais State, sponsored by the Biominas Foundation. The second is sponsored by the ParqTec Foundation in Sao Carlos, Sao Paulo State and houses two programs under one roof: CINET - Centro Incubador de Empresas Tecnologicas (Incubation Center for Technology Enterprises) and SOFNET, a facility with computer lab for enterprises in the computer software field.

    Methods for info gathering
    The purposes of the study are two-fold: First, to gain an understanding of the technology incubation system in Brazil through the experience of Biominas and ParqTec; second, to field test a rapid assessment approach to the evaluation of technology incubation programs, looking at their practices, effectiveness, sustainability and stakeholder satisfaction. While incubators are designed for specific situations, it is useful to identify good practices and actions in the Brazilian experience, for adaptation to help enhance the performance of technology incubators elsewhere.

    Summary of results
    The ParqTec and Biominas incubators have demonstrated success in a number of areas. They have nurtured and launched new enterprises, developed linkages with universities and research centers, secured broad-based support from the private and public sectors, and met the expectations of stakeholders. Both contribute to the development initiatives of their respective city and state governments as well as to their tax revenues.

    ParqTec and Biominas are typical of most Brazilian incubators in their reliance on high levels of public subsidy. This leaves them vulnerable should subsidies be reduced or eliminated as a result of economic crisis or changes in government policy. Faced with calls for government austerity, it is imperative that Brazil's business incubators actively develop new sources of service and rental revenues to supplement public subsidies.

    The problems for further research are essentially in the areas of information gathering and defining the metrics, both the quantification and interpretation of costs and benefits, at the micro- and macro-economic levels. Few programs have adequately built into their management systems the routine accumulation and analyses of data on the success or failure of their graduates, and indeed of the service facility itself. Yet it is precisely these longer-term outcomes that validate (or invalidate) the usefulness, impacts and sustainability of business incubation and other SME development programs.

    Associated Activities and Documents
    Synthesis Documents
    »Rio de Janeiro DC Conference, 1999 (global)