Activity File
Business Incubation Toolkit for Small Island Developing States (SIDS)
Summary
Small Island Developing States (SIDS) in all regions face challenges in promoting innovation and small business development. There is a pressing need to gather, and share lessons from experience in how policy makers, the private sector, the international donor community and other key stakeholders can work together effectively to enhance the conditions for business incubation, innovation and entrepreneurship in SIDS. Building on its work in the Caribbean with the European Commission, infoDev is developing a SIDS Business Incubation Toolkit.
Background / Terms of Reference
A recent study commissioned by infoDev on improving private sector competitiveness and economic diversification in the Caribbean found that the availability of business support services and financing for new businesses, particularly technology based businesses, is almost non existent in the region. The study concluded that the failure to deliver technical assistance and financial resources to entrepreneurs and SMEs is the primary impediment to their growth. This failure is compounded by the other inherent challenges facing entrepreneurs and SMEs in the Caribbean, as in other SIDS, including small domestic markets, dispersed regional markets and growing global competition in traditional sectors such as agri-business and tourism.
One tool for addressing the business support needs of entrepreneurs and SMEs is business incubation. Business incubators have successfully and sustainably been used to help nurture new businesses during their most vulnerable stages of development by providing basic support services until these businesses “graduate”—once they have become financially and commercially viable. Developing countries, such as India, have utilized business incubators as engines of local innovation and new business creation.
As part of the European Commission’s SFA 2005 Financing Proposal, resources have been allocated for establishing a national business incubator center in Dominica, St. Lucia and St. Vincent. These three business incubators will be designed to provide localized business support services for entrepreneurs and SMEs, particularly ICT-enabled innovators, as well as leverage the regional incubator network office, which will be located in one of the four SFA 2005 countries, to facilitate knowledge sharing beyond their local networks and to create new markets opportunities for their clients.
infoDev is assisting the European Commission (EC) and its client countries in designing and implementing effective and sustainable business incubators in the region and this work has been a valuable input into the formation of this toolkit, which will include two case studies (Technology Innovation Centre in Jamaica and the National Computer Board - Incubator Centre in Mauritius), as well as best practices drawn from other business incubators operating in SIDS.
The SIDS Business Incubation Toolkit will completed in 2008.