Startup incubators give their take on Callaghan Innovation proposal

Startup incubators give their take on Callaghan Innovation proposal
Industry reaction to Callaghan Innovations tech incubator proposal from Creative HQ and ecentre

Callaghan Innovation is looking to launch a new breed of tech incubator (as opposed to the more typical founder-focused incubator model) to commercialise technology that's coming out of universities and research institutes, and introduce grants that would include a clawback clause in the event of eventual sale offshore (something most would welcome). 

So what do industry players think?

Potential aplenty: stimulating deal flow and blending the commercial with academic

In Auckland, Steve Corbett, chief executive of Massey University's ecentre, says a lack of ​commercialisable IP coming out of universities and research institutes is an issue, or technology that's been licensed off.

"From an NZ Inc perspective, this scheme could have real potential if it can bring more technology out of the universities and CRIs. Putting that incentive system in place up front, which takes more of the risk at the early stage, is a good way to do it."

Corbett, who recently crossed paths with Yossi Smoler of the Technological Incubators Program in Israel while in Boston, says Smoler imparted a few key learnings that New Zealand should take heed of. 

Financial commitment from the government makes a real difference, as does the willingness to fine-tune the model over time and having a strong venture capital industry.

"Is there sufficient follow-on money? I suspect the way a couple of these models will evolve is they'll probably have some international money coming through [in the second stage]," he says. 

"I think it's just making sure there would be enough good tech deal flow coming out of the research institutes and universities."

Israel's ingrained entrepreneurial culture, of course, also gets a mention.  

"We are an entrepreneurial group of people down in New Zealand, and Israel just has such a higher percentage of scientists and engineers out of the population. That's something we've really got to work on, making sure they form part of that entrepreneurial culture."

Naturally, Corbett also warns against throwing the baby out with the bathwater.

"We've got to be careful we don't knock the founder-centric model, it's been very much part and parcel of the way New Zealand companies have evolved. If you can maintain that entrepreneurial spirit of the founder-centric model and get that same spirit in to tech-centric ones, then I think we're really starting to see some potential. The place would just go off."

Tweaking the formula and engaging with industry

In Wellington, Creative HQ chief executive Stefan Korn has also welcomed the news.

While Creative HQ won't be participating in the tech incubator proposal itself (“The focus for Creative HQ will continue to be on entrepreneur-led acceleration and incubation. We are always driven by the team first and how we can support and develop the capabilities of startup founders to grow compelling global businesses") he says it's great that the government recognises the importance of new ventures to New Zealand's growth.

“However I would like to see more dialogue between government and key players in the ecosystem around supporting startups. They should be working closely with the deep expertise and experience locally about what works in New Zealand and how to do it better. Within the incubators and startup support networks there is a huge amount of knowledge they can leverage in devising the right strategies to support startups and founders of innovative businesses."

It would have been ideal for Callaghan Innovation to engage with the industry before finalising the design of the programme to ensure maximum effectiveness, he says, and it should do so in the future with other similar initiatives.

"There appears to be a tendency to look for best practice in other parts of the world and seek to implement the same programmes in New Zealand," Korn says.

"While it is useful to look at what other countries do, it's really important to then understand the key critical success factors in making these models work overseas and how these factors differ in New Zealand."

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