The millions earmarked by Trond Giske, Minister of Trade and Industry, for an incubator for industry and technology gave rise to enormous enthusiasm in the region. NOK 5 million have now been allocated to SIVA for establishment of an industrial incubator at Herøya. If everything goes according to plan, the incubator – which will be affiliated to the industrial centre at Herøya – will be operational over the New Year.
The industrial centre at Herøya has made it onto the SIVA map and has received the millions heralding the start of establishment of an incubator intended to reinforce industrial development.
“This is a form of recognition for the industrial centre and the skills possessed by the companies here and in the region in general,” says Rolf Olaf Larsen, business development manager at Herøya Industripark (pictured below).
Linking With an incubator, promising entrepreneurial ideas and entrepreneurial companies are linked with an established, structured environment with a view to realising the potential of these entrepreneurs. SIVA – the Industrial Development Corporation of Norway – is the state organisation tasked with approving and running 50 incubators in all parts of Norway, 19 of which focus specifically on industry.
The aim of this is to bring about more industrial establishments and new jobs in the region, the county or Norway in general.
Optimistic The incubator at Herøya will be run as a limited company with both private and state owners. Telemark County Council, Vekst i Grenland, Telemark University College, SIVA and Herøya Industripark are involved at present, and discussions are in progress with additional companies and an incubator environment in Telemark.
“We are optimistic about achieving approval from SIVA for the innovation company,” says a dedicated Larsen, who is looking forward to getting started in the New Year.
Innovation company at Herøya The aim is to identify, arrange, develop and commercialise good ideas for new growth companies, and also to help promote spinoffs and provide new growth in established companies.
The innovation company will help to develop new growth companies by means of marketing, ideas capture and business development, incubation and commercialisation.
“One common model is where the entrepreneurial company is allocated resources in return for the incubator receiving shares in the company,” explains Larsen. “For instance, the incubator contributes ‘Proof of Concept’, which means that the incubator invests straight funds in studies and research at NORNER, SINTEF or similar in order to assure the quality of the concept.”
Typically, it takes two to three years to develop an entrepreneurial company in an incubator.
Plan for further growth The company must also be an active participant in the creation and running of an early phase fund. The intention of the fund is to contribute towards the financing of the companies which emerge out of the incubator.
“The transition from incubator to growth phase is often the most critical point, and most companies fail at here,” states Larsen. “This is why we want to help to establish an early phase fund which will guarantee capital for further growth within the companies. Trade and industry in the region maintain a positive attitude towards a regional early phase of this type.”
Larsen refers to the incubator at Kjeller as a good example of this. The fund managers are also involved early on in the selection process for admission to the incubator. This ensures good continuity in the process of developing exciting growth companies.
Entrepreneurs wanted from all over Norway Larsen wants to see industrial entrepreneurs from the entire county and Norway as a whole. The incubator is open to individuals, projects at industrial companies both large and small, student projects and projects from other networks.
The number of ideas input into an incubator is crucial to success. Of 50 ideas, maybe four or five undergo further processing.
“We want to cooperate widely and exchange knowledge and expertise with exciting environments,” says Larsen. “For example, we want to work with networks such as Green B Norway and IKT Grenland, Notodden Utvikling and Gnisten inkubator at Notodden. We are also looking at close cooperation with Telemark University College, where we can assist with commercialisation and business development skills and help to commercialise ideas and inventions from employees and students. The university environment could offer useful expertise to projects and companies in the incubator.”
Why should entrepreneurs provide the ideas for the incubator at Herøya?
“Entrepreneurs can garner attention here,” states Larsen. “The incubator has to act as an instrument for promising entrepreneurial ideas and entrepreneurial companies in which they are linked to an established, structured innovation environment which helps to provide useful skills, networks and finance,” he says.
Formula for success Industrial establishment undergoes a number of phases. In simple terms, it can be divided into three phases, the first of which may involve development of the idea in an incubator. After that, the idea might have to undergo further testing on a pilot scale, and eventually it will hopefully end up in industrial production.
“Herøya can act as an advisor and as a contributor in all these phases. This new opportunity for an industrial incubator at Herøya reinforces the things we are already working with,” emphasises Larsen, pointing out the Herøya pilot arena where full focus is now being directed.
International studies indicate that incubators increase the chances of small and medium-sized enterprises enjoying success with their establishments, and that companies in an incubator which works well grow more quickly than companies outside the incubator in terms of both revenues and numbers of employees. (source: SIVA).