$31m for business incubators - with a new technology focus

Crown agency Callaghan Innovation is inviting applications from companies who want become part of an expanded network of business incubators under a pilot programme funded to the tune of $31.3 millon.

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The new type of technology-focused incubator will be a privately-owned business focused on the commercialisation of complex intellectual property primarily sourced from publicly funded research organisations, such as universities and Crown research institutes.

They will be also able to access a new repayable grants programme on behalf of the start-up companies they incubate. Under the programme, the Government will contribute up to $450,000 over two years to eligible companies resident in technology-focused incubators. The incubator owners will need to provide at least $150,000 themselves additionally in order to qualify for the full amount. This pilot repayable grants programme has been allocated $31.3 million over four years.

A request for proposals document (RfP), issued today, follows extensive consultation with the New Zealand start-up support community, the Ministry of Business, Innovation and Employment, New Zealand Trade and Enterprise, the New Zealand Venture Investment Fund, and international experts including Israel’s leading thinker on technology incubators, Oren Gershtein.

The RfP seeks proposals from parties interested in being appointed founder-focused or technology-focused incubators.

“New Zealand has not been creating enough high value companies,” says Callaghan Innovation GM of Accelerator Services Chris Somogyi. “The modified Incubator Support Programme and the new Repayable Grants Programme that comes with it were designed to address this shortcoming and will remove much of the risk currently preventing the private sector from investing in early-stage, IP-rich  start-ups.”

“The creation of the new tech incubators is a significant step within the New Zealand innovation system. The work they will do will provide a more targeted and sophisticated approach to increasing the rate of formation and success of early-stage start-up firms. This, in turn, will support the growth of emerging sectors and technologies and foster entrepreneurship.”

The RfP documents, with all the details of the new scheme, can be downloaded from the GETS website (www.gets.govt.nz) by searching for reference code 41753.

Organisations applying for either founder-focused and technology incubator status have until 23 April 2014 to return their submission. Successful proposals are likely to be announced late May or early June.

Callaghan Innovation - a new Crown agency that includes the old Industrial Research Ltd - is also dishing out $566 million in growth grants over the next four years, as allocated in the government's 2013 Budget.