INNOVATION:Firms that begin life as part of a business incubator have a far greater chance of success, so what are we doing to encourage new companies?
A COMPUTER SCIENCE department is not normally the kind of location where you imagine fairytales might come true.
But more than two decades ago there must have been just a little sprinkling of magic dust in the air when Dr Chris Horn, Annrai O'Toole and Dr Sean Baker sat down in the department at Trinity College Dublin to discuss their research on improving the "interoperability of large scale, distributed computing systems".
Ten years later that research proved to be the cornerstone of a new breakthrough technology which transported Horn, O'Toole and Baker from the world of academic research to what ultimately became the NASDAQ-listed software company Iona.
It made them millions in the process, and gave them the kind of status which is normally reserved for those with superhero powers.
Twenty years ago the concept of campus incubators and spin off companies was just beginning to emerge here. The idea of creating a dedicated space where businesses could come together and share facilities originated in the US. It is widely acknowledged that the first example of this was the Batavia Industrial Centre in New York which opened in 1959.
But it was another 20 years before the idea behind business incubation began to gather support.
The concept initially took off in the northeast and midwest states which suffered from high unemployment, largely due to excessive factory closures.
The buildings which these factories had occupied were divided up into potential accommodation for new firms and this in turn physically created the first business incubation centres.
Around the same time, the American National Science Foundation launched a programme to encourage entrepreneurship and innovation at leading universities and when private investors decided it was time to get in on the act, the idea of business incubation centres began to gain momentum.
By the early 1980s incubation centres were no longer concepts - they were producing results in the form of start-ups and jobs.
The US Small Business Administration saw the potential which could be realised and started a national business incubation development programme.
But when college entrepreneurs in the US decided to ditch their mainstream courses and concentrate on a new computer craze - later to become known as the world wide web - campus incubators really took off. Fast forward 10 years, and the success of the likes of YouTube, Google and Yahoo proved once and for all that university businesses were not just for the IT fanatics.
Today every third-level institution in Ireland is trying to inspire its students and researchers to become the next generation of chief executives and multi-million euro entrepreneurs.
Campus business incubators and innovation centres aim to assist primarily high tech, often high-risk start-up ventures take the defining step to commercialisation.
The country's seven universities now have a dedicated team of people whose sole mission is to take a brilliant idea and turn it into a successful company.
But is it working in practice?
According to the European Commission it is. Research shows the return on investment in start-up firms is good.
"Companies that start in an incubator grow rapidly, and only 15 per cent fail in their early years," says Dr Eoin O'Neill, director of entrepreneurship at the Research and Innovation Services in Trinity College.
"Incubation is instrumental in the creation of high-quality jobs at an average cost per job of €4,400 - considerably less than that of many alternative policy measures," says O'Neill.
The centre acts as a relationship broker between researchers, funding agencies and industry. It is also responsible for managing Trinity College's intellectual property, technology transfer and innovation, commercialisation and entrepreneurship.
O'Neill believes the facts speak for themselves. Setting Iona aside, around 40 companies have emerged from the Trinity's campus over the last 20 years - although Iona alone is also responsible for an astounding 18 spin off firms.
"Business incubators enable college-based entrepreneurs to promote high level knowledge-based skills from ideas to successful start-ups. It is about communicating the path to employment for students.
"The role of the incubator is to impart to students with the necessary skills to set up a company - to focus on training the entrepreneur."
Trinity now boasts one of the country's major incubator/enterprise centres, a 160,000sq ft development centre which is currently being converted into a knowledge-based research-driven company generation and support facility.
In his experience, O'Neill believes there is no one formula for success that will guarantee any college entrepreneur the kind of success enjoyed by the founders of Iona.
"We have to provide the support and put our energies into encouraging our entrepreneurs to explore the potential."
Micéal Whelan, of NovaUCD, the college's €11 million Innovation and Technology Transfer Centre, says it prides itself on its "culture of entrepreneurship".
"NovaUCD is providing a community of entrepreneurs with not only incubator space when they are at similar stages of development, but it also gives people who are based here a comprehensive business support programme - the opportunity to access a wide range of advice and consultancy services from finance.
"It's not just enough to have a good idea - it's certainly a good starting point but you also have to have the right people in place to complement the academics. Investors want to see multi-skilled teams, and NovaUCD has an established track record in this area and in encouraging entrepreneurs to realise their potential," he says.
So could universities prove to be the gateway to success for start-up firms?
Ron Immink, the operations manager at Invent-DCU, the commercialisation gateway at Dublin City University, certainly thinks so.
"Setting up a successful start-up company is increasingly difficult. Growing a start-up to a size at which it can compete on the global market is only achieved by a happy few. The product life cycles are getting shorter and shorter. In that context, innovation is becoming a key success factor for business growth. This is where universities can add tremendous value to start-ups. But that is not all," he adds.
"Not only can universities support start-ups with their research and technology, but they also have extensive national and international networks of academics, researchers, industry partners, entrepreneurs, SMEs, alumni, etc, which can be tapped for almost anything a start-up needs."
Companies such as Slidepath demonstrate that Invent-DCU is determined not only to help start-ups, but to ensure that they grow.
Bioinfomatics company Slidepath was founded in 2004 by DCU academics Dr Donal O'Shea and Dr Sean Costello.
Today it is one of the market leaders in the field of management of digital slide content for education and external quality assurance, and its clients range from drinks company Diageo to the Department of Neuropathology at Beaumont Hospital, Dublin.
But Dublin does not have the monopoly on campus incubators. Enterprise Ireland has invested more than €46 million to date to ensure campus and business incubators are flourishing across the country.
A total of €38 million has been invested in incubators in institutes of technology, a further €4.2 million has been earmarked for centres in universities, and €4.1 million will be invested in university bio-incubation facilities.
By the end of next year all institutes of technology in Ireland will have business incubation centres on campus.
Pat O'Brien, acting manager of the Enterprise Ireland Campus Incubators Initiative, says innovation is one of the core objectives of Enterprise Ireland.
"As a nation we rely on our ability to innovate in order to drive forward our economic growth and international competitiveness. The creation of incubation centres is a necessary step to exploit the full potential of many innovative business ideas created by the groundbreaking research being undertaken at third-level institutions throughout the country. By supporting such centres, Enterprise Ireland aims to foster innovation by facilitating the development of these research ideas into viable commercial realities."
O'Brien believes companies which locate in a business incubator centre greatly improve their chances of surviving - particularly in the difficult first two years.
"Campus companies can avail of a range of supports in addition to the actual physical space required to establish and grow the business. Enterprise Ireland provides funding for the building and in the case of the institutes of technology, support towards a manager for each centre. The manager is then available as a resource to assist tenant companies through all the challenges of the start-up phases; the development of business plans, identifying and accessing relevant support mechanisms."
Among the first institutes of technology to establish a business innovation centre on campus was Sligo IT in 1989.
Now know as ITSBIC, the centre currently provides space and support to 15 businesses which each employ between one to eight people.
It concentrates on helping two main groups - entrepreneurs or businesses which are closely associated with the institute, and research companies which have spun out of the institute already.
Among its current clients is a company called Technical Ideas, which has come up with an new software product known as Socrates, aimed at the healthcare sector.
But it's not just third-level institutions who are bidding for the next generation of high-tech: high-yielding companies want them to set up home with them.
Organisations such as WESTBIC - the Business and Innovation Centre in the Border, Midland and Western region of Ireland - are keen to persuade high-tech entrepreneurs that it is just as good as any university or institutes of technology when it comes to providing the right environment to grow a start-up.
John Brennan, financial controller of WESTBIC says companies which locate with them have a survival rate of over 90 per cent. "In reality we're not competing with the universities or the institutes of technology, but we are working with them in a complementary fashion. But the fact is that campus incubators do cater for research projects coming out of universities, while we are dealing with every stage: from companies which are at the concept stage to emerging businesses."
So the message is if you have a brilliant idea then your country's universities, institutes and innovation centres want you.
But as Ciaran O'Connell, managing director of (e)Learning Union, one of NovaUCD's new ventures can testify - you don't become the next Iona overnight.
The company, which commercialised its product in 2004, provides e-learning management solutions and consultancy services.
"Being in NovaUCD has given us the opportunity to take advantage of a network of support services and be surrounded by like-minded people. It gives you the opportunity to talk to entrepreneurs who can share their experiences with you, talk about the challenges they have faced and of course swap problems," he says.
BREEDING GROUND: IRISH INCUBATOR SUCCESSES
DR CHRIS HORN, vice-chairman of the board and co-founder of NASDAQ-listed Iona Technologies, a Trinity College spin-off.
Iona Technologies was a campus company from 1991-1993.
It originated from a European Union-funded IT research programme known as ESPRIT.
Horn says Iona's participation in the Esprit project was crucial.
"We wouldn't have been able to form the company if we had not been carrying out research and development in Trinity in a European setting.
"We participated in an EU-wide R&D project that was funded by Brussels in conjunction with the university's research centre.
"We were one of the earliest companies to commercialise our research: now the process is a lot more streamlined but in the early 1990s there was a fairly small number of people doing what we were doing," he says.
"I think we were surprised initially by the level of our success, I remember we thought at one stage that if we ever able to get to the size where we would employ 100 people it would be something," he says.
"But at the beginning we never thought we would get past that size because I don't believe people felt it was possible to create a software company in Dublin and compete internationally - I think everyone thought you had to be in Silicon Valley at the time to do that," he adds.
"But we showed everyone that it was possible and Iona is still a role model today - it proves that you can create a successful company in Dublin.
"I believe that is a lot of good research being done today and that it is vitally important that that research is transferred to a commercial setting.
"I believe it is critical that we exploit research and development into new products and new companies, it is important to the future of our economy and to the competitiveness of the Irish economy."
JOHN DOYLE, product manager, Changing Worlds, UCD spin-off.
Changing Worlds is a mobile applications firm which was founded in 1999 to commercialise technology developed as part of an extensive research programme at UCD.
A market leader in its field, it now employs over one hundred staff in Dublin, Kuala Lumpur and San Francisco.
Product manager John Doyle says the role UCD played was hugely critical to the company.
"The support services provided as part of the incubation service were crucial to our building up the business. We were able to work closely with UCD and we continue to maintain close links with UCD research teams - in terms of the initial set up and the on-going relationship we have it has been absolutely crucial to our on-going success."
VIVIENNE WILLIAMS, chief executive, co-founder of Trinity College spin-off Cellix Ltd.
Cellix Ltd describes itself as an instrumentation company which provides new microfluidic technology-based solution in the areas of drug discovery, diagnostics and medical research.
Williams says that without the support from Trinity College, the company would not exist today.
"We couldn't have got to the stage we are today without Trinity," she says.
"We first incorporated our company on 2004, but it was 2006 before it spun out of college. It took us a while to identify our markets and products and Trinity was instrumental in putting us in touch with the right people.
"Campus incubators don't just provide space - they allow you to access all the other facilities that Trinity provide.
"They helped us focus on the commercialisation of our ideas and have been involved in every stage of our development," she says.
INCUBATORS PROVIDE
Business and research space;
Access to administration services;
A support network;
Access to technical advice along with training and coaching;
A learning environment;
Access to a range of experts;
An entrpreneurial culture
INCUBATOR SUCCESSES
Iona
Trinitech
Baltimore Technologies
Changing Worlds
New World Commerce
Piercom
Q Set
Andor Technology
Enbio
