Kasetsart business incubator
set to bridge the gap between
Thailand's educational and private sectors
By Jon Fernquest |
Google, one of the most successful businesses in the world, was founded by two graduate students at Stanford University in California (Read early history of Google; see photo on right)
Innovative new technologies with business potential originate in university research projects everyday.
Transforming these promising discoveries into successful profit-making businesses and entirely separate and difficult problem. This is where the idea of a business incubator proves useful.
Business incubators provide an environment that helps new small start-up companies grow while they are still young. Like an incubator protects a newborn baby from the outside world, the business incubator protects a new business and increases the odds of survival in the long-term.
In a business incubator sharing resources such as office facilities, staff, and computers allow a start-up business to cut costs. Management guidance, technical assistance, and assistance in obtaining financing are also provided.
Kasetsart University Business Incubation Center (KU-BIC)
In Thailand the Kasetsart University Business Incubation Center (KU-BIC), established in 2006, "aims to turn the university's research work into real business."
The Kasetsart business incubator orignated as a special project directed by the Public Private Technology Transfer Center (PPTC) of the Thai government. This centre was founded in 1997 to help promote the small and medium-sized businesses (SMEs).
Six select companies now occupy the fifth and sixth floors of the centre's building. The facilities have room for up to 15 companies. New companies are expected to stay in the business incubator for between one and three years.
The university provides academic specialists and laboratory facilities relevant to many different kinds of businesses including agriculture, fishery, forestry, engineering, computers, food, and machinery.
The presence of a business school provides technical specialists the opportunity to improve on their business skills such as formulating business plans and launching marketing campaigns.
The center also helps to connect students, alumni and lecturers at the university. Students will get their first taste of work in the private sector.
A sports gear start-up company: A case study
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"Punwess Sukavanich and Wassana Kanpukdee had always dreamed of forming their own business. But it was not until they were 25 that the pair quit their jobs at a technology company to form Sci-Arms Co along with four of their peers last March (See photo on the right).
The six-month-old company is now busy preparing for the roll-out of Raidz suits, which are worn in an outdoor laser-tag shooting game similar to Paintball. Although they see big potential in this sports-gear niche, they find it tough to secure a foothold.
Of the six partners, two run the company full-time. Mr Punwess, an electrical engineer from Mahidol University, is managing director responsible for creating and tailoring the 30,000-baht Raidz suit, equipped with a laser simulation system. The job requires that he pool all the knowledge he has in engineering, computer games, wireless networks and innovative ideas.
Meanwhile, Ms Wassana, an accounting graduate from Walailak University, looks after finance, office administration and marketing.
For production, they chose to outsource local manufacturers. They expect to sell 100 Raidz suits annually, mostly to resorts and game field owners in the United States, Europe and Australia.
As new entrepreneurs with a small budget of one million baht, they chose to adopt "guerrilla marketing", which involves seeking all possible ways to promote the product at the cheapest costs. Since their product targets a niche market, the media they prefer must be able to focus on specific groups such as the internet and direct mail."
Benefits of business incubators to the national economy
Business incubators have the potential to jumpstart innovation in Thailand. In the last five years, 45,000 new companies have registered with the Department of Business Development of the Thai government. Out of these 45,000 new companies, 25,000 of them soon went out of business. Intense competition makes business survival a difficult task indeed.
Business incubators also have the potential to reverse the brain drain from universities to the private sector. Some of Thailand's most gifted scientists and engineers decide to work in the private sector because of the higher incomes available there. Business incubators can reverse this brain drain by effectively bringing the private sector within the university.
Incentives have been sdjusted and the "university is offering flexibility to lure the lecturers to work with the centre. Some rigid bureaucratic regulations are being removed. Incentives are also be given in the form of shares in the disclosure, royalty and licence fees of viable products."
Business incubators also have the potential to "create jobs, revitalize neighborhoods, commercialize new technologies, and strengthen local and national economies." They may also be a useful tool for "diversifying rural economies, providing employment for and increasing wealth of depressed inner cities, and transferring technology from universities and major corporations."
Over the years the range of industries that have benefited from business incubators has grown:
"The earliest incubation programs focused on a variety of technology companies or on a combination of light industrial, technology and service firms – today referred to as mixed-use incubators. However, in more recent years, new incubators have emerged targeting industries such as food processing, medical technologies, space and ceramics technologies, arts and crafts, and software development. Incubator sponsors have also targeted programs to support microenterprise creation, the needs of women and minorities, environmental endeavors and telecommunications."
(Source #1: Bangkok Post, business, Bamrung Amnatcharoenrit, page B3, 09-09-08, temp-link)
(Source #2: link)
(Source #3: link)
Vocabulary:
business incubator - an environment that helps new small businesses survive, grow, and succeed (See Wikipedia)
technologies with business potential - technologies that a business could sell for a profit
business potential - how successful business business might be
the odds of X - the probability or likelihood that X will happen in the future
increases the odds of survival in the long-term - the business is more likely to survive for longer
Kasetsart University Business Incubation Center (KU-BIC) -
peers - the people you work with or go to school with
laser-tag shooting game - a sport where players attempt to score points by hitting other players with a laser gun (See Wikipedia)
Paintball - a sport in which players shoot each other with paintballs filled with paint, over 5.4 million people played the game in the United States annually, with over 1.5 million playing at least 15 times a year (See Wikipedia)
a niche - a small specialised area (See glossary)
a niche market - a small specialised market (customers have their own very special requirements)
targets a niche market - make efforts to sell to a small specialised market
a sports-gear niche - a small specialised market for sporting goods
a foothold - a strong position from which further advances can be made
secure a foothold - moveor advance to a strong position from which further advances can be made
outsource - hire another business to do work (instead of doing the work inside the company)
guerrilla marketing - promoting products on a very low budget, taking advantage of the small size of a business and its closeness to customers, relying on time, energy and imagination instead of big marketing budgets, describe aggressive, unconventional marketing methods (See Wikipedia)
direct mail, advertising mail - sending potential customers letters with advertisements inside (See Wikipedia)
jump start - to get something working quickly
went out of business - stopped doing business
brain drain - loss of intellectual and technical workers (usually from devloping countries to devloped countries, but in this case from one sector of the Thai economy (educational) to another (See Wikipedia)
lure - attract, get people to come to some place
royalty fees - money paid by a company to a person for using their writing or ideas
licence fees - money paid by a company to a person for using something they own in their business (for example, to use the image of Mickey Mouse in advertising you must first pay the creator and owner)
viable - is able to live, continue existence and functioning
