DEVELOPMENT: Business Incubators Hold First World Conference

By Mario Osava Reprint | | Print |

Mario Osava

RIO DE JANEIRO, Oct 22 2001 (IPS) - The business incubators movement is a fast-growing route towards development through the creation of technology-based small businesses in Brazil, which is hosting the first World Conference on Business Incubation.

Around 600 business experts from 30 countries are meeting in Rio de Janeiro Tuesday through Friday to discuss the future and role of business incubators, international cooperation, and financing, study success stories, and pool information.

Business incubator centres provide, for a limited period of time, space as well as assistance and advice on technology, marketing and other aspects like obtaining credit to individuals or groups wishing to set up small businesses or needing help with the startups they have already created.

Many incubators have emerged in connection with universities and government agencies, but there are private initiatives as well. Not all of the ventures getting their start in incubators are technology-based.

The business incubation movement first emerged in the United States in the 1960s. It took root in Brazil in the mid-1980s, and has grown fast. Worldwide, South America’s giant is now second only to the United States with respect to the number of incubators.

A total of 180 business incubators – 135 of which are already fully operating – are registered with the Brazilian Association of Business Incubators and Science Parks (ANPROTEC).

Computing, telecommunications, biotechnology and agribusiness are the main areas in which the 1,100 “resident” companies in Brazil – startups located within the centres – are active. Some 9,100 people work in the incubators, 5,200 of them in the resident companies, where 40 percent of the workers are owners.

The incubators play an important role because they expand access to technology and credit, offer resources for setting up a new venture, give startups added credibility, and open up new horizons for businesses, Fátima Chamma, the owner of Chamma da Amazonia, a company based in Belem, the capital of the northern state of Para, told IPS.

The 40-year-old perfume and cosmetics company, which was founded and run by her father, an accountant and self-taught chemist, was destroyed by a fire in the 1980s and rebuilt by Fátima in 1996 with the help of the business incubator of the Federal University of Para.

The company has diversified, and now produces decorative items made of recycled wood and other raw materials from the jungle, as well as perfumes and cosmetics created from a variety of Amazon plants.

Today, 22 outlets, including four owned by Chamma itself and 18 franchises, sell the articles produced by the Chamma factory in Belem with a variety of raw materials from providers in the Amazon region, said the businesswoman.

The focus is on sustainable development, and the factory works with natural materials that have been extracted from the jungle using eco-friendly techniques that also help boost living conditions for local people in the Amazon region, said Chamma.

The factory manufactures organic products made from raw materials extracted from native species of trees and herbs known for their medicinal, aromatic and cosmetic properties.

The andiroba tree, for example, produces an oil that generates energy or is used in candles to ward off mosquitoes. It is also believed to have a number of medicinal properties.

In Brazil, as in other developing countries, “there is a lack of dialogue between academia and industry,” and that stands in the way of the country taking full advantage of available know- how, while generating an impression of technological backwardness, said Luis Afonso Bermúdez, president of ANPROTEC.

Authorities acknowledge that there is also little investment in technological research and development by either the government or the private sector.

Business incubators are an excellent alternative for overcoming such problems, said Bermúdez, because large-scale resources are not necessary to foment the creation of small businesses that put to use existing technologies.

The emergence of incubators within Brazil’s universities stimulates the entrepreneurial spirit and leads many scientists to try their hand at setting up a company, thus narrowing the gap between the worlds of academia and business.

Chamma da Amazonia opened its doors again in 1996 with just three low-skilled employees, said Fátima Chamma, a lawyer. “Now there are 43 of us, nine who have higher education and five who are still in the university,” she noted.

Businesses spend a limited time in the incubators. Chamma left the centre in June this year “to make room for others.” The only reason she did not do so earlier was because she ran into obstacles in the paperwork for setting up her new outlets.

The incubator of the Federal University of Para, which began to operate in 1996, has room for eight “resident” businesses. However, it also provides assistance to ventures set up outside the centre and to companies that have become independent, like Chamma da Amazonia.

This week’s World Conference on Business Incubation (WCBI) has been organised by ANPROTEC, the Brazilian Micro and Small Business Support Service (SEBRAE), the National Business Incubation Association (NBIA), and the International Association of Science Parks (IASP).

Business incubator managers, government agency technicians specialising in economic, scientific and technological development, investors and venture capital operators, science park managers, consultants, researchers and others interested in the process of creating and developing new ventures will take part in the three-day conference.

More information is available at the following website: (www.wcbi.com.br-english-).

The chief topics will be entrepreneurship, regional development, venture capital, technological innovation, best practices in business incubators management, incubation models, synergy between business incubators and science parks, private business incubation initiatives, and international cooperation.