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First Business Incubator Awards Announced

15 July 2001

The first awards under the Government’s business incubator support programme have been approved by Industry New Zealand, the nation’s leading economic development agency.

“The focus of these first awards is to help establish a network of quality business incubators, whose role is to mentor and guide entrepreneurial companies through their start up phase and move them towards commercial operation.

“Emphasis in the awards has been placed on the development of strong management in the business incubators, effective operating infrastructure and the delivery of services to tenants.

“Many of these business incubators are now moving into operational mode, where they will play a key role in turning good ideas into great companies,” said Neil Mackay, chief executive of Industry New Zealand.

Industry New Zealand received 13 applications from business incubators around the country, and its board approved 12 awards worth a total of $950,000. The awards range from $10,000 to $130,000.

Funds were awarded for purposes as diverse as business planning, training of incubator management, development of IT capability within business incubators, access to administrative support, marketing of services and payment for mentoring and other business services to tenants, and for bringing in overseas experts in incubator management.

To optimise the use of award funds, Industry New Zealand has requested that several programmes initiated by incubators should be made available nationally to other business incubators. This will include development of a best practice manual, and visits by overseas experts.

Regional breakdown of funding was: Auckland ($445,000), Wellington ($260,000), Christchurch ($200,000), Dunedin ($35,000), Wanganui ($10,000).

The incubator support programme was introduced by the Government in April following consultation with the business incubator sector. It establishes a nationwide network of incubators which use best practice in delivering a range of business training services to promising companies. Their objective is to help emerging companies successfully commercialise good ideas, and to reduce their high failure rate.

“The value of business indicators has been proven overseas, where they have been in operation since the 1970s. In the USA the number of incubators is growing at 10% each year (year 2000 figures). And a 1997 survey put the return on public investment in them at 5:1,” said Neil Mackay.

“Targeted assistance, through the awards programme, will lead to the development of a strong business incubator network from which New Zealand will benefit through the emergence of companies which will generate employment and foreign exchange earnings.

“Business incubators will help arrest the failure of small businesses. In New Zealand, 86% of enterprises employ less than 5 people. It has been suggested that around 80% of them fail within three years of establishment.”

Ends/…

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