Term 4 2017 BSB50215: Innovation Incubation Process Explained

This assignment provides a detailed explanation of the innovation incubation process, a crucial concept in business development and entrepreneurship. The paper defines innovation and its significance in creating a competitive advantage, emphasizing its relationship with entrepreneurship. It then delves into the incubation process, breaking it down into three key stages: pre-incubation, incubation, and post-incubation. The pre-incubation stage focuses on supporting entrepreneurs in developing business ideas and plans. The incubation stage offers support during the initial growth phase, including access to resources and mentoring. Finally, the post-incubation stage addresses the needs of matured companies, often involving activities like sales improvement. The assignment also discusses incubators, their types, and their vital role in fostering innovation. It provides examples of innovation-based incubators and their impact, particularly in Australia, highlighting the services and support they offer to start-ups. The paper references key literature on business incubation and innovation.

Online Learning Component Cover Sheet
Week 8
Term and Year Term 4 2017
Assessment Type Discussion question
Date
Student Name:
Student ID No:
Submission deadline: Due at the end of Week 8 (upload on Sunday by 11:59pm) via Moodle Submission
Point
Qualification : BSB50215 Diploma of Business
Unit Code: BSBINN501
Unit Title: Establish systems that support innovation
Assessor’s Name
Student Declaration: I declare that this work has been completed by me honestly and with integrity.
Name:
Signature:
Date:
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Online learning/ evidence gathering conditions
Each online learning component is recorded as Five hours (5), Three hours (3) or Zero hours (0). A student can only
achieve competence when all online learning components listed under procedures and specifications of the fulfilling the 5-
hour online learning per week section are Satisfactory. Your trainer will give you feedback in the student learning
management system after the completion of each online learning component. A student who is assessed as Zero hours (0)
is eligible for re-submission. Should the student fail to submit the online learning component, a result outcome of Zero
hours (0) will be recorded. Any form of plagiarism or copying other students’ work would also result in a Zero hours (0)
record outcome and there would be no provisions for a re-submission.
Resources required for this Assessment
 All documents must be created using Microsoft Word.
 Upon completion, submit the online learning component (using this official template) via the student learning
management system to your trainer along with the completed assessment coversheet.
 Refer the notes on eLearning to answer the tasks
 Any additional material will be provided by Trainer
Instructions for Students
Please read the following instructions carefully
 This online learning component is to be completed according to the instructions given by your assessor.
 Students are required to conduct their research and complete this online learning component outside the class contact
time.
 Feedback on each task will be provided to enable you to determine how your work could be improved. You will be
provided with feedback on your work within 2 weeks of the online learning component due date.
 Should you not answer the questions correctly, you will be given feedback on the results and your gaps in knowledge.
You will be given another opportunity to demonstrate your knowledge and skills to be deemed competent for this unit
of competency.
 If you are not sure about any aspect of this online learning component, please ask for clarification from your assessor.
 Please refer to the College re-submission policy for more information.
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Task
Explain the innovation incubation process(not more than 800 words).
Innovation can be defined as a change that creates or adds value for providing competitive
advantage. Innovation is applying something new for a particular use. It requires a deep
knowledge existing conditions and more creativity. It is related to how things work, what
can be done for their improvement and what things were left out. With the help of creativity
and imagination to invent, mentor and finding new opportunities, which will make the users,
believe as having a benefit. Innovation focuses on existing links to provide broader market
for innovation and entrepreneurs. In 1934, an Austrian economist Joseph Schumpeter who
was the first economist address the significance of innovation in the economic cycles. He
considered entrepreneurship putting more focus on innovation. According to him, innovation
with, new products, new methods of production, new markets and new types of enterprises
(Phan and Lamine 2016)
Incubation is the process that is activated when there is a need for supporting entrepreneurs
so that they can develop business. As per the concept of innovation, it is no different from
entrepreneurship. They are related and interdependent largely. The entire process or certain
parts the process are placed whenever the requirement for developing new entrepreneurs,
develop the business idea and to transform it into viable and sustainable activity is felt (Phan
and Lamine 2016).
The phases of Incubation consists of three stages
Pre-incubation- Pre-incubation is concerned with all the activities that are required to
support the entrepreneurs in development of business ideas, business model and business
plan in order to enhance the chances of creating an effective start-up. This stage consist of
assessing the idea, training, and direct assistance that is required to put the entrepreneurs in
situations to make a business plan. Pre-incubators are mostly university-affiliated incubators.
Incubation- This stage is concerned with giving support to the entrepreneurs from the
introduction stage to the phase of expansion. This is a mid-term process generally lasting for
three years from the establishment of the enterprise. The activated actions are accessibility to
financial resources, coaching services, hosting services, mentoring services and the
appropriate training. Physical incubation is a part of the whole incubation process.
Post incubation- This stage is concerned with the operations that are to be carried out when
the company has matured. This is the stage when if the company were in a physical
incubator would leave it. There are varieties of services that will be required by small and
medium enterprises like increase in sales or improvement in productive processes. With the
help of scouting and detecting activities innovation introduction is done. Post incubators are
renamed as accelerators (Patton 2014).
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Fig 1: Innovation Incubation Process (Source: Fernández et al. 2015)
Incubators
The places where activities of incubation are carried out are known as incubators. It is a
place where would be entrepreneurs and small, medium enterprises get a suitable place
where they get facilities and expertise so that their needs can be addressed and new ideas can
be developed which can be transformed into realities. Even if an incubator does not provide
physical incubation services and is concentrated to virtual incubation, it will be an incubator.
Types of incubators
Pre-incubators- It provides services like, expert advices, coaching services and direct
consultation. It provides facilities like workshops to help the prospective entrepreneurs for
business ideas development and assist in elaborating the business plan.
Academic incubators- These incubators can be found in universities and research centres
providing assitance to those businesses that either are elaborated by students or are part of
Research and Development activities.
Other incubators are, general-purpose incubators or sector specific innovators (Mian,
Lamine and Fayolle 2016).
Innovation based incubator
Innovation based incubators are centres where new entrepreneurs, small and medium
enterprises develop new ideas. It provides a common ground to areas of entrepreneurship
and innovation. It facilitates ideas to be innovative and profitable that can be used for a
profitable business that is focused towards a particular market. The value augmentation to
the entrepreneurs is required to be used properly. An enterprise can exist without innovation
but innovation cannot exist in absence of enterprise.
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An entrepreneur is seen as an agent of change who creates value with the help of an
innovative idea in terms of change and risks and the market induces both things to happen.
Incubators play a very important role for an effective innovation environment. Australia has
30 incubators and accelerators. Most of them are located in the capital cities focused on
information and communication technology. The number of incubators in Australia is very
less compared to that of United states, around 1250 and Europe has 130 incubators (Junaid
Ahmad 2014).
The ATP Innovations of Australia has helped many software and hardware and life sciences
start-ups ever since they were established in 2000. It provided mentoring, office space and
professional services which helped the start-ups to gain success.
Ingogo taxi booking and payment system is an example of successful business that grew and
flourished with the support of ATP Innovations.
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References
Fernández Fernández, M.T., Blanco Jiménez, F.J. and Cuadrado Roura, J.R., 2015. Business
incubation: innovative services in an entrepreneurship ecosystem. The Service Industries
Journal, 35(14), pp.783-800.
Junaid Ahmad, A., 2014. A mechanisms-driven theory of business incubation. International
Journal of Entrepreneurial Behavior & Research, 20(4), pp.375-405.
Mian, S., Lamine, W. and Fayolle, A., 2016. Technology Business Incubation: An overview
of the state of knowledge. Technovation, 50, pp.1-12.
Patton, D., 2014. Realising potential: The impact of business incubation on the absorptive
capacity of new technology-based firms. International Small Business Journal, 32(8),
pp.897-917.
Phan, P.H. and Lamine, S.A.M. eds., 2016. Technology entrepreneurship and business
incubation: Theory, practice, lessons learned. World Scientific.
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