Business Incubation Equals Business Success

Business Incubation Equals Business Success

Business incubation in New Zealand is proving to be a resounding success, according to the national incubator association.

Incubators New Zealand chairman Andrew Hamilton says recent statistics show that companies assisted by regional incubators have added strong value to the New Zealand economy and boosted employment.

“Since September 2002, these incubator residents have raised over $29 million in equity capital and more than 500 people are now employed nationwide by incubator companies,” he says.

“Those statistics show fantastic growth and promise. In the December 2004 quarter alone, incubator residents raised more than $13 million in equity capital.”

Incubators New Zealand represents 16 regional incubators, which in turn assist and encourage start-up companies to reach their full potential. Currently, more than 125 fledgling companies throughout New Zealand are being helped by the incubators.

Mr Hamilton says this assistance is already being noted by New Zealand’s business community. “In the last four years we’ve had 59 companies graduate from incubators and enter the mainstream business environment.

“That’s a great start but more importantly, the incubation industry has matured to the point where we’re seeing close to 30 companies a year graduate. Within three years from now, that number will be closer to 50.”

The industry also received a welcome boost this week with the announcement that Telecom will provide sponsorship and assistance to Incubators New Zealand.

Telecom chief executive Theresa Gattung says Telecom is keen to help nurture new companies that can contribute to New Zealand’s economic future.

“Kiwis value innovation and the idea of ‘giving something a go’ and Telecom recognises that innovation and entrepreneurship are important, not just to help individual companies grow, but to help the New Zealand economy grow. Our support for Incubators New Zealand is also a natural extension of the support we already provide to regional incubators such as The ICEHOUSE, Canterbury Innovation Incubator and Innovation Waikato,” she says.

The new relationship will be highlighted later this month with the presentation of the inaugural national incubator awards in Wellington and an expo to showcase some of the up and coming incubator resident companies.

“The Telecom New Zealand Incubator Awards are a chance to celebrate the successes of these emerging companies and, just as importantly, let Kiwis know how good the future can be if we’re economically successful,” says Ms Gattung.

As well as recognising those companies currently achieving in the incubators, the Awards will also acknowledge the 25 companies that have successfully exited the incubators and achieved ‘high growth’ status.

To be high growth, a company must double its employee numbers, achieve revenue of $500,000 during incubation or raise $500,000 in investment. Generating revenue of at least $5 million within three years of exiting an incubator is also a qualifier.

Incubators New Zealand chairman Andrew Hamilton says the achievements of these 25 companies are proof of the success of the intensive quick-growth strategy promoted by the incubation industry.

“Slow and steady doesn’t win the race when it comes to the kind of stand-out start-ups the New Zealand incubator industry is looking for,” he says.

“The incubator industry has committed itself to helping fuel the growth of the New Zealand economy at the fastest rate possible, which means nurturing high growth companies which can contribute the most to our national bottom line in the shortest possible time.”

“The number of high growth companies incubators have already nurtured, combined with Telecom’s sponsorship, are evidence that the incubation industry has come of age in New Zealand.”

The next three years will see the association focus on developing the profile of the industry, lifting the number and quality of incubator resident applicants, and developing initiatives to ensure New Zealand follows best practice in incubator management.

As Mr Hamilton says, “Now is the time to build on the momentum that has already been achieved in the last four years and add real benefit to the economic landscape of New Zealand.”

Facts: Incubators New Zealand was established in 2003 to encourage and support growth within the start-up business community and provide a framework for communication. Since its inception, the organisation has provided assistance for dozens of companies nationwide. For more information, please visit www.incubators.org.nz

Dates: The Telecom New Zealand Incubator Awards, April 26, Wellington Town Hall. The Telecom New Zealand Incubator Expo, April 27-28, Wellington Town Hall. Open to the public on Thursday 28th April from 10am-4pm.

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