Business Incubation System (Mot masters research project report )
1. Nile University MOT Masters Program
Business Incubation
Research Project Report
This document represents a research project report
submitted to Nile University, Management of Technology
Masters Program. It presents a research project conducted
on business incubation systems, their international best
practices in design and management, and the role of science
and technology policies to build the supporting ecosystem.
Submitted To:
Dr. Tarek Khalil
tkhalil@nileuniversity.edu.eg
Acting President and NU Provost
Head of Management of Technology Graduate School
Submitted by:
Tarek Salah Kamel
tarek.kamel@nileu.edu.eg
th
Document Ver. 1, Wednesday, 24 of June 2009
2. Contents MOT Research Project Report
EXECUTIVE SUMMARY 3
RESEARCH METHODOLOGY 4
RESEARCH PROBLEM 4
RESEARCH APPROACH 4
INTRODUCTION 5
BENEFITS OF BUSINESS INCUBATORS 6
CONCEPT EVOLUTION AND DEFINITIONS 7
BUSINESS INCUBATION SERVICES 9
BUSINESS INCUBATION PROGRAMS BEST PRACTICES 11
INCUBATION AND ENTREPREENRSHIP IN EGYPT 17
UCF BUSINESSS INCUBATION PROGRAM 20
PROGRAM PARTNER ORGANIZATIONS 22
UCF BUSINESS INCUBATION PROGRAM SERVICES 27
INCUBATION PROGRAM PROCESS AND KEY PERFORMANCE INDICATORS 30
UCFBIP MANAGEMENT STRUCTURE 31
UCFBIP BEST DESIGN PRACTICES 32
GAP ANALYSIS OF THE NIS IN EGYPT 33
THE ROLE OF SCIENCE AND TECHNOLOGY POLICY 34
INTRODUCTION TO SCIENCE AND TECHNOLOGY POLICY 34
MAJOR TRENDS IN SCIENCE, TECHNOLOGY AND INNOVATION POLICIES 37
SCIENCE AND TECHNOLOGY POLICY AND NATIONAL INNOVATION SYSTEMS 38
CONCLUSION AND S&T POLICY RECOMMENDATIONS 41
REFERENCES 43
ACCOMPANYING RESEARCH WORK 45
ANEXXES 46
EXHIBIT 1: BENCHMARKING ANALYSIS OF TECHNOLOGY BUSINESS INCUBATORS 46
EXHIBIT 2: KEY ELEMENTS OF BUSINESS INCUBATION ENVIRONMENT 47
EXHIBIT 3: TECHNOPOLIS FINLAND SAMPLE SERVICES AND PROCESS 48
EXHIBIT 4: ENTREPRENEURSHIP ECOSYSTEM 49
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3. MOT Research Project Report
EXECUTIVE SUMMARY
This research project report presents a research work done at Nile University about business incubation
systems. The research studied local entrepreneurship and incubation systems in Egypt, then
international best practices of incubation systems design and management, then conducted a field
research study at the University of Central Florida Business Incubation Program (UCFBIP). This was
followed by a survey research on science and technology (S&T) policy development in many countries
to build the supporting ecosystem for business incubation programs.
A gap analysis is identified relating to best practices of incubation management systems and the
surrounding supporting national innovation system in Egypt. These results are followed by an
introduction to the Science and Technology (S&T) Policy to outline specific recommendations that are
needed to effectively build best practice business incubation systems in Egypt. The main conclusions of
that research are that:
Business incubation systems are effective tools for economic development, increasing
employment, and technology commercialization; hence should be viewed within a whole Small
and Medium Enterprises (SMEs) business support national strategy.
Business incubators cannot graduate sustainable high-growth firms without effective
integration with other components of a mature National Innovation System (NIS), which needs
to be built and improved as outlined in the research and as identified in the gap analysis. The
national S&T policy is the formal tool to identify and build the national innovation system.
Specific societal model components must be studied and taken into consideration in order to
forecast the expected outcome of a proposed incubation system and in order to set the right
policies and procedures that enable it to effectively interact with its surrounding business,
research, and governmental environment.
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RESEARCH METHODOLOGY
RESEARCH PROBLEM:
Business incubation programs are attaining a growing interest in the Arab World and in Egypt, and are
viewed mostly as economic development tools for job creation and technology development through
the graduation of sustainable SMEs. In this regard, can these incubation programs be effective in
their mission independently or they need to be immersed and interconnected to a whole
National Innovation System (NIS), influenced by a National S&T Policy, that supports
entrepreneurship, innovation and technology development and commercialization?
RESEARCH APPROACH:
The research intends to answer the following questions:
What is the role of business incubators in economic development? And what are the best
practices such systems should adopt?
What supporting ecosystem environment should be in place for these systems?
How Science and Technology (S&T) Policy within developing countries should influence
building that needed ecosystem?
To answer these questions, the following research process was followed:
1. Conduct a survey research on incubation and entrepreneurship support systems in
Egypt.
2. Conduct a desktop study research on international incubation systems.
3. Conduct a field study research at the University of Central Florida Business Incubation
Program (UCFBIP) in the US for 1 month.
4. Specify a gap analysis on business incubation programs
5. Survey different national S&T policies and trends and challenges in S&T policy
development.
6. Conclude with S&T policy recommendations for supporting incubation systems in
Egypt.
The outline of this process can viewed through the following graph.
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INTRODUCTION
Business incubators are proven tools for creating jobs, encouraging technology transfer and starting
new sustainable businesses. Set up to assist in the growth and development of new enterprises; there
are currently about 4,000 business incubators worldwide, with around 1100 in North America alone
[1]. The incubation model has been adapted to meet a variety of needs, from fostering
commercialization of university technologies to increasing employment in economically distressed
communities to serving as investment vehicles.
Most business incubation programs are set up to produce companies that create jobs and wealth in
their communities. Business incubators nurture the development of entrepreneurial companies, helping
them survive and grow during the start-up period, when they are most vulnerable.
According to the National Business Incubation Agency (NBIA) 2006 report on the state of business
incubation industry; in 2005 alone, it‘s estimated that North American incubators assisted more than
27,000 startup companies that provided full-time employment for more than 100,000 workers and
generated annual revenue of more than $17B [1]
Business incubators are characterized by the following [1]:
Business incubation is a Business Support Process that accelerates the successful development
of start-up and fledgling companies by providing entrepreneurs with an array of targeted
resources and services.
These services are usually developed or orchestrated by incubator management and offered
both in the business incubator and through its network of partners.
A business incubator‘s main goal is to produce successful firms that will leave the program
financially viable and freestanding.
These incubator graduates have the potential to create jobs, revitalize neighborhoods,
commercialize new technologies, and strengthen local and national economies.
Business incubators reduce the risk of small business failures.
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BENEFITS OF BUSINESS INCUBATORS
The benefits of a well-managed incubation program can be many-fold for different stakeholders [4]:
For tenants, it enhances the chances of success, raises credibility, helps improve skills,
creates synergy among client-firms and facilitates access to mentors, information and seed
capital.
For governments, the incubator helps overcome market failures, promotes regional
development, generates jobs, incomes and taxes, and becomes a demonstration of the
political commitment to small businesses,
For research institutes and universities, the incubator helps strengthen interactions
between university-research-industry, promotes research commercialization, and gives
opportunities for faculty/graduate students to better utilize their capabilities,
For the business, the incubator can develop opportunities for acquiring innovations, supply
chain management and spin-offs, and helps them meet their social responsibilities.
For the local community: it creates self-esteem and an entrepreneurial culture, together
with local incomes as a majority of graduating businesses stay within the area.
For the international community: it generates opportunities for trade and technology
transfer between client companies and their host incubators; leading to a better
understanding of business culture, and facilitated exchanges of experience through
associations and alliances.
These are the desired outcomes, often not achieved due to poor management and other factors.
Emerging evidence, nevertheless, suggests that in many situations the benefits indicated above are
realizable and out-weigh the net public funding.
National Business Incubation Agency (NBIA) has developed interesting statistics about business
incubation programs in the US [13]:
Historically, NBIA member incubators have reported that 87% of all firms that have
graduated from their incubators are still in business.
1,100 business incubation programs were operating in North America in early 2006
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NBIA estimates that in 2005 alone, North American incubators assisted more than 27,000
start-up companies that provided full-time employment for more than 100,000 workers and
generated annual revenue of more than $17 billion.
NBIA estimates that North American incubator client and graduate companies have created
about half a million jobs since 1980. That is enough jobs to employ every person living in
Denver, Colorado.
Every 50 jobs created by an incubator client generate approximately 25 more jobs in the
same community.
Research has shown that for every $1 of estimated public operating funding provided; the
incubator clients and graduates of NBIA member incubators generate approximately $30 in
local tax revenue alone.
NBIA members have reported that 84% of incubator graduates stay in their communities
and continue to provide a return to their investors.
Publicly supported incubators create jobs at a cost of about $1,100 each, whereas other
publicly supported job creation mechanisms cost more than $10,000 per job created.
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CONCEPT EVOLUTION AND DEFINITIONS
In its generic sense, the term 'business incubator' is often used to describe a wide range of
organizations that in one way or another help entrepreneurs develop their ideas from inception to
commercialization, and the launching of a new enterprise. A broad definition of the term embraces
technology centers and science park incubators, business and innovation centers, organizations which
have no single physical location and concentrate instead on managing a network of enterprise support
services ('incubators without walls'), so-called ‗new economy‘ incubators, and a variety of other models
[3]. The evolution of the business incubator concept is summarized in Figure 2:
Figure 2: Evolution of the Business Incubator Model
The origins of business incubators can be traced back to Western industrialized countries in the late
1970s and early 1980s. Faced with a rapid rise in unemployment resulting from the collapse of
traditional industries, it was recognized in both Europe and the USA that fresh strategies were needed
to help regenerate crisis sectors, regions and communities. Strategies pursued in the 1980s were
broadly characterized by a switch in emphasis from a 'top-down' approach relying on exogenous factors
and involving public intervention to transfer surplus mobile capital and jobs from developed to
underdeveloped or declining regions, to a 'bottom-up' approach focusing on maximizing the
indigenous potential for economic development. At the same time, business incubators began to be
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used as instruments to support innovation and technology transfer [3]. Following are various definitions
for such entities:
1998 Helsinki Workshop (Physical Aspects Emphasis)
A place where newly created firms are concentrated in a limited space. Its aim is to improve the
chance of growth and rate of survival of these firms by providing them with a modular building with
common facilities (telefax, computing facilities, etc.) as well as with managerial support and back-up
services. The main emphasis is on local development and job creation.
NBIA (More than Physical Aspects)
Business incubation is a dynamic process of business enterprise development. Incubators nurture
young firms, helping them to survive and grow during the start-up period when they are most
vulnerable. Incubators provide hands-on management assistance, access to financing and
orchestrated exposure to critical business or technical support services. They also offer
entrepreneurial firms shared office services, access to equipment, flexible leases and expandable
space — all under one roof
UK Business Incubation (UKBI) (3 additional Aspects)
Business Incubation is a dynamic business development process. It is a term which covers a wide
variety of processes which help to reduce the failure rate of early stage companies and speed the
growth of companies which have the potential to become substantial generators of employment
and wealth. A business incubator is usually a property with small work units which provide an
instructive and supportive environment to entrepreneurs at start-up and during the early stages of
businesses. Incubators provide three main ingredients for growing successful businesses - an
entrepreneurial and learning environment, ready access to mentors and investors, visibility in the
marketplace
ELAN (No Emphasis on Physical Attributes)
The European Community Business and Innovation Centers (EC BICs) – as they are officially known –
are support organizations for innovative small and medium-sized businesses (SMEs) and
entrepreneurs. Operating in the public interest, they are set up by the principal economic operators
in an area or region, in order to offer a range of integrated guidance and support services for
projects carried out by innovative SMEs, thereby contributing to regional and local development.
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BUSINESS INCUBATION SERVICES
There are many services that modern technology incubator programs offer for their tenants, which
can be extracted from the survey conducted in most international incubator services such as:
University of Central Florida Technology Incubator (UCFTI), Technopolis Finland, The UK Business
Incubator, European Business Incubators Benchmarks and NBIA Business Incubation Reports [3-7].
These services can be summarized as follows:
These set of services can be grouped into three main growth phases for a startup, which are:
1. Pre-Incubation services,
2. Incubation services &
3. Post-Incubation services
Exhibit 1 shows the results of a benchmarking study of business incubation services for the EU and
US [8,9]. Other key elements of business incubation environments are shown for France & UK in
Exhibit 2 [10,11]. Exhibit3 shows sample process for Technopolis Finland, which is considered one of
the very successful incubation programs in Europe.
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BUSINESS INCUBATION PROGRAMS BEST PRACTICES
Following are some best practices and guidelines that should be
taken into consideration in designing a business incubation program
[15]:
Comprehensive Business Assistance Programs
A. Needs Assessment:
Develop and implement a systematic process for
assessing client needs that has the flexibility to
adapt to the changing environment surroundings.
Assess needs prior to accepting a business into
the incubator and on a continual basis after it has
entered the program.
B. Coaching and Facilitation:
Dedicate sufficient staff time to meet with clients on a regular basis.
Allow Clients to make decisions and to complete tasks.
Provide oversight and support as clients use program resources.
C. Monitoring Client Progress
Develop milestones for each client company designed to meet the specific goals of the
client and the incubator
Develop and implement a systematic process for monitoring the client's progress in
meeting milestones.
Utilize monitoring process to modify the service package offered to clients.
Utilize monitoring process to graduate clients form the program, once they‘ve reached
the exit condition level outlined in your policy, whether it was based on amount of
revenue, number of employees, or number of customers.
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Professional Infrastructure
A. Know How Networks:
Develop a board-based pool of individual advisors from the private and academic
sectors and ensure they have the technical and business skills needed to support clients
businesses in various stages.
Establish a large enough pool of advisors to minimize the impact on a specific provider,
especially if services are provided on a pro-bono (for the public good) basis.
Limit Exclusive arrangements with individual service providers to ensure that
appropriate services are available to meet client needs on a quality basis.
Negotiate a fee structure to minimize the financial impact on the client (Example
include pro-bono services, services in exchange for equity and services with deferred
payment until equity capital is secured).
Facilitate the interaction between service provider and the client.
Screen Service providers and establish a feedback mechanism to assess client progress
and satisfaction.
B. Mentors:
Develop a pool of volunteers willing to serve as mentors for clients. Identify mentors
who have been involved in actual business operations in the appropriate industries at
various stages of the development process from proof-of-concept to initial public
offering and/or acquisition.
Ensure that mentors meet with the clients according to a regular schedule.
Meet with mentors periodically to monitor client progress and identify additional needs.
Screen mentors and establish a feedback mechanism to assess client satisfaction.
C. Advisory Boards:
Develop a pool of professionals, technologists, business owners and others willing to
volunteer their services as advisory board members for clients. Seek individuals who
have experience in the appropriate industries at various stages of the development
process from proof-of-concept to initial public offerings and/or acquisition.
Ensure that advisory boards meet with clients according to a regular schedule.
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Meet with advisory boards periodically to monitor client progress and identify
additional needs.
Screen advisory board members and establish a feedback mechanism to assess client
satisfaction.
Client Capitalization and Financing
A. Provide access to debt and equity capital to launch and sustain the growth of clients and
train clients on requirements for obtaining financing.
B. Establish linkages with ―angel investors,‖ venture capitals (VCs) and corporate equity
investors through capital networks, brokers and personal contacts.
C. Consider creating in-house equity and debt funds to seed a deal and to fill financing gaps.
D. Create relationships with corporations that are willing to provide services (such as product
development, manufacturing, sales & distribution for clients in the incubator in lieu of
capital.
Client Networking
A. Proactively encourage client networking to establish and sustain the incubator's nurturing
environment.
B. Host brown-bag lunches, CEO roundtables and affiliates programs to bring business owners
together to exchange ideas, share experiences & leverage resources.
C. Hire incubator management that values client interaction and networking and is capable of
facilitating these processes.
D. Pay attention to how incubator facility design issues impact networking.
Technology Transfer and Commercialization
A. Develop Partnerships with technologists and technology transfer offices with the principal
objective of commercializing technology through new company formation.
B. Manage conflicts between all parties; offer incentives for commercialization; and work to
change potentially incompatible cultures to become more responsive
C. Establish a seamless interface between the incubator and the technology generator to
ensure fast and effective commercialization.
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University and Research Centers Laboratory Linkage
A. Establish linkages with universities and research centers and labs to leverage the valuable
assets, which their entities can provide to the incubated clients.
B. Use these linkages to provide clients with faculty/technologists consulting services, students
interns and employees, and access to technical facilities and equipments, databases,
researchers and research and development financing.
C. Ensure that partnerships and linkages provide value to all parties.
Facility Basics
A. Ensure flexible space and the necessary amenities (such as high-speed communications,
parking security, among others) to meet the needs of different clients at various stages of
their development.
B. Encourage client interaction through the use of common meeting areas (kitchens, mail
rooms, copy rooms and other areas).
C. Provide sufficient leasable space with flexible options for the incubators to reach financial
sustainability.
Governance and Staffing
A. Ensure that the incubator has an effective governing body including private-sector
perspectives.
B. Achieve consensus among staff and major stakeholders on the mission of the incubator
C. Ensure that the incubators' president/CEO has appropriate skills and is capable of helping
companies grow.
D. Ensure that staffing is sufficient, that certain staff members are designated to work primarily
and directly with client services and that those people have highest qualifications.
E. Hire entrepreneurial president/executive directors capable of identifying client needs and
matching them with a wide range of resources, and ensure they do this without impeding
the client's need to learn, and without diminishing the client‘s responsibility for growing a
business.
F. Offer competitive compensation and benefits packages that attract and retain quality staff.
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Client Screening and Graduation
A. Utilize an extensive screening process to select clients that can benefit from the value–
added services that the incubator provides.
B. Ensure that screening processes determine the needs of the applicant, the ability of the
incubator to provide value to the applicant and the willingness of the applicant to accept
the value provided by the incubator.
C. Establish appropriate graduation criteria.
Incubation Program Evaluation
A. Utilize a range of quantitative and qualitative measures to evaluate performance relative to
the incubator's mission.
B. Obtain client feedback on the value of the program while they are residents and following
graduation.
C. Ensure that the evaluation processes are both manageable and consistent and that
outcomes are used to improve the incubator performance.
D. Provide evidence of success to incubator management, stakeholders and investors.
E. Allows incubator management to compare program effectiveness with other, like
incubators.
F. Provide evidence of incubation program and service quality.
G. Provide information necessary to ensure that programs meet client need and evolve as
necessary.
H. Identify areas of improvement.
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INCUBATION AND ENTREPREENRSHIP IN EGYPT
A survey research was conducted to list the national entrepreneurship and incubation programs in
Egypt and to understand to what extent the ecosystem in Egypt is ready to support incubation
programs.
That survey was conducted in cooperation with Mr. Yasser Tawfik and went through many resources,
which includes international studies, research reports, related conferences, as well as interviews with
experts. Following is an overview of these resources:
Reviewing studies of international organizations like: UNDP, UNISCO, ESCWA …etc.
Reviewing studies of working organizations, like: SFD, GAFI, ExpoLink, sme.gov.eg, …etc.
Investigating business support web portals, such as: Afkar-Gadida, Kenana-Online, ...etc.
Studying:―IMC Market Research on Entrepreneurship Concept in Egypt‖ (April 2007),
Studying related conferences materials:
o ―EIEP Entrepreneurship Certificate‖ Program launch event.
o ―SMEPol - Mobilizing Entrepreneurship in Egypt‖ Event materials.
o ―SMEPol - Financing Opportunities for SMEs in Egypt‖ Conference Report.
o ―SMEPol - SME/Entrepreneurship Research Challenges in Egypt‖. (SMEPol).
o ―SME Research Challenges in Egypt – Major Barriers‖. April 2007
The research generated a list that can be found in [ARW2, 3] of:
Techno Parks
Incubation Initiatives
Entrepreneurship Programs
Business Support Organizations
Business Support Portals
Business Plan Competitions
Business Training Centers
SME Funding Organizations/Programs
There were some difficulties in conducting a research on Entrepreneurship in Egypt due to 2 main
factors, which are:
Difficulty to find information because of lack of a central responsible entity and information
national portal
Lack of ability to validate programs objectives and achievements due to unavailability of
publicly published performance measures.
Exhibit 4 shows the entrepreneurship ecosystem under study.
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Following is an overview of the local research results:
4 Techno Parks
Mubarak City for Scientific Research and Technology Applications
Egypt Smart Village
Northern Coast Technology Valley
Sinai Technology Valley
6 Major Incubation Programs
Egyptian Incubators Association – 38 incubators (low tech)
Mubarak City for Scientific Research and Technology Applications - 2 incubators
Business Women Association – incubator project
MCIT Incubator in Smart Village
Nahdet El-Mahrosa Incubator
6 Entrepreneurship support programs
The Egyptian ICT Entrepreneurship Program (EIEP-USAID)
SMEPol Project – Ministry of Finance & CIDA.
– إفهمYouth & Entrepreneurship Civic Education Program
Intilaaqah Program by Shell
Sustainable Development Association
EYE- Egypt
Business Support Organizations
Identified 44 entities giving business training and consultancy services for SMEs, which
represent NGOs as well as private and governmental organizations:
- Social Development Fund (SDF) - Small Enterprise Development Group (SEDO)
- IT Industry development Agency (ITIDA)
- SMEPol Project (Finance Ministry, CIDA, IDRC & GAFI)
- Business Development Services Support Project (BDSSP)
- SME Promotion Programme (GTZ)
- Alexandria Business Association
- Altadamun
- Mansoura Business Association
- Dakahlya Businessmen‘s Association for Community Development
- National Council for Women
- Egyptian Business Women Association (EBWA)
- Egyptian Exporters Association
- Egyptian Small Enterprise Development Foundation
- Al-Mobadara
- Future Generation Foundation
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- Lead Foundation
- Nahdet El-Mahsousa
- Sanabel
- Sharkiya Businessmen‘s Association for Community Development
- + more.
Business Support Portals
Social Development Gate: www.kenanaonline.com/page/SME
Egyptian Investment Portal: www.investment.gov.eg/Moi_Portal/en-GB/Default
General Authority for Investment & Free Zones (GAFI): www.gafinet.org
Trade Point: www.tpegypt.gov.eg
TegaraNet: www.tegaranet.com
Women Business Development Center: http://217.52.27.150/newwbdc/default.asp
Afkar Gadida: www.afkargadida.com
Business Plan Competitions
Arab Business Challenge
Arab Technology Business Plan Competition (ASTF) progam wit Intel+UC Berkeley
Arab MIT Business Plan Competition
TDF competition
Industrial Business Plan (IMC-ASTF-EJB)
Business Idea Award (Alexandria)
Young Innovators Award. (Nahdet Al-Mahrousa)
Funding Bodies for SMEs
12 NGOs (microfinance)
26 Banks. (Loans based)
3 Equity sharing bodies
Regional Initiatives affecting the Egyptian Business environment
ESCWA:
- Technology Center
- Network of Technology Parks and Incubators
Investment Promotion Unit (UNIDO)
Medibtikar
Arab Business Angels Network (ABAN)
NBIA
InfoDev
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UCF BUSINESSS INCUBATION PROGRAM
This part of the report shall cover the results of the field study research conducted at the University of
Central Florida Business Incubation Program (UCFBIP) www.incubator.ucf.edu.
That field research was based on:
Attending some of the daily meetings at UCFBIP,
Visiting incubator sites and partners sites,
Visiting sites of the Technology Park at UCF
Investigating websites of related organizations,
Interviewing key responsible persons and presenting the work to all for validation.
The persons interviewed were:
Dr. Tom O’Neal, UCFBIP Director & UCF VP for Research
Gordon Hogan, Business Development Executive & Manager of 2 sites (Photonics & Downtown
Orlando)
Carol An Dykes, Technology Incubator Site Manager
Esther Vargas Davis, Seminole County Incubator Site Manager
Dr. Cameron Ford, Center of Entrepreneurship and Innovation (CEI) at College of Business
Administration (COBA), UCF
Kirstie Chadwick, Venture Lab Director & Coach at UCF
Jerry Ross, Executive Director, Disney Entrepreneur Center (DEC)
Dr. Yasser Hosni, UCF Industrial Engineering and Management Systems. Orientation about UCF
Technology Centers and facilities
Rene Ayala, Administrative Assistant at UCF Technology Incubator site.
Managers of some incubated companies and graduated ones from the UCFBIP.
PROGRAM OVERVIEW
The UCF business incubation program is sponsored and
managed through a collaborative partnership between [16]:
University of Central Florida www.ucf.edu
Orange County www.orangecountyfl.net
The City of Orlando www.cityoforlando.net
Florida High-Tech Corridor www.floridahightech.com
City of Winter Spring www.winterspringsfl.org
Seminole County www.seminolecountyfl.gov
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Those collaborating entities are all members in the advisory board of the program, through which they
provide insight and guidance to incubator management and help promote the incubation program in
the local community.
The goal of the UCF Business Incubation Program (UCFBIP) and its community partners is to facilitate
smarter, faster startup and growth of emerging companies so those companies will become financially
successful, high growth companies in the community:
The sustainability of that program is secured through continuous funding from key stakeholders. The
mission embraced is that funding is pumped in this program in Central Florida for economic
development and diversification, technology commercialization, and generation of high-growth
companies that create high-wage jobs and pay taxes to the government. The working policy is that the
UCFBIP doesn‘t take equity in startups after graduation and depends mainly on public funding to
sustain, however the rent paid by clients only covers half of the rent of the incubator actual facilities.
Figure 3: UCFBIP Facilities
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PROGRAM PARTNER ORGANIZATIONS
The UCFBIP network with a wide range of organizations to provide added value assistance to their client
companies. Many of these organizations are listed on the incubator website (www.incubator.ucf.edu)
under ―Incubation Program‖ then under ―Partners‖. Some of those partners are also members of the
advisory board. The following shows the developed network:
Figure 4: UCFBIP Partner Organizations
AeA – Florida Council
AeA (www.aeanet.org) is the nation's largest high-tech trade
association. Established in 1943, AeA has more than 3,500 member
companies that span the high-technology spectrum, from
software, semiconductors and computers to Internet technology,
advanced electronics and telecommunications systems and
services. The Florida Council of AeA is located in the University
Tech Center facility. Through the partnership, Incubator clients are
provided a one-year membership free-of-charge in AeA. The many
benefits of membership include procurement opportunities alerting, education and training, high-tech
lobbying, human resource programs (including group insurance programs), industry data and
publications, small business resources and state advocacy programs.
Disney Entrepreneur Center (DEC)
The Entrepreneur Center (www.Disneyec.org) is located in
downtown Orlando at 315 East Robinson Street, in the Landmark 1
Building. It provides a ―one-stop shop‖ for entrepreneurs and small
businesses for counseling services, training programs, and financing
programs. The Center is the home of several entrepreneurial service
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organizations such as the US Small Business Administration, UCF Small Business Development Center
(SBDC), SCORE, the Hispanic Business Initiative Fund, The Alliance, Florida First Capital., the UCF
Technology Incubator, and many others. A Business Information Center provides access to online and
print resources for business information research.
The following graph shows a list of the actual service providers offices at DEC one-stop-shop for
entreprenrus followed by another one for detailed services :
Figure 5: Disney Entrepreneur Center Service Provider Offices and Their Services
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Inflexion LLC
Inflexion Fund, L.P. (www.inflexionvc.com) managed by Inflexion
Partners, is a seed and early-stage venture capital fund organized with
an emphasis on company building and harnessing regional, national,
and international resources of the fund‘s managers and strategic
partners. Inflexion is the first and only Florida-focused fund leveraging
a network venture capital model involving some of the largest
institutional investors in the country. Inflexion‘s corporate
headquarters is located in the UCFTIP in the University Tech Center facility. Orlando-based partner,
James Boyle, and the other Inflexion partners work with Incubator clients offering business plan reviews,
advice and capital-raising strategies.
UCF College of Business Administration (COBA)
UCF COBA (www.bus.ucf.edu) works closely with the
Incubator to offer a number of programs throughout
the year. The ―Excellence in Entrepreneurship
Certificate‖ Course is a seven-session interactive
course developed specifically for entrepreneurs in
today's market. Offered 3-4 times a year, the course is
open to any entrepreneur or aspiring entrepreneur in the community. All applicants to the Incubator are
required to complete the course as part of the application process. The course is a tool to establish a
certain level of business knowledge among potential Incubator clients. It provides the entrepreneurs an
opportunity for additional due diligence on their business concept. It also offers the Incubator better
insight into the potential of the businesses and their business development needs. Members of the UCF
College of Business faculty and practicing professionals from the local business community teach the
sessions. The course concludes with each participant presenting their business before a panel of
experienced entrepreneurs and business advisors.
The Center for Entrepreneurship & Innovation (CEI)
in the COBA serves as the focal point for academic
entrepreneurship programs as UCF. CEI also assists in
identifying and placing business students as interns
and part-time employees in Incubator companies.
Some courses in the College require the students to work in teams with a local company and Incubator
clients may have the opportunity to benefit from assistance provided by those student teams. The
annual UCF business plan competition, UCF chapter of Collegiate Entrepreneurs Organization (CEO) and
other activities are also managed by CEI.
UCF Office of Research and Commercialization (ORC)
The Office of Research and Commercialization
(www.research.ucf.edu) manages all of the contracted
research activities for the University. For Incubator
clients, the Office of Research is a source of assistance
for identifying UCF faculty and facilities for partnerships
in applied research, product development and testing.
Particular emphasis is given to the Small Business Innovation Research program, the Small Business
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Technology Transfer program, and the Florida High Tech Corridor Matching Grant programs to support
University partnerships with industry. The Office of Research is located in the University Towers in the
Central Florida Research Park.
The Office of Technology Transfer (OTT), located in the Office of
Research, manages the intellectual property acquired to protect the
University‘s rights to innovations resulting from the research at UCF.
Those technologies are then made available for licensing to
companies or other organizations for commercialization through
the creation of products, processes or services. A number of
Incubator companies have licensed patents, copyrights, trademarks or trade secrets as the technology
platform for their company.
The following graph shows the different entities under management of the UCF ORC, in which the
incubation program fully interacts with all of them:
Figure 6: UCF Office of Research and Commercialization Affiliated Programs
UCF Orange County Venture Lab
The UCF Orange County Venture Lab
(www.venturelab.ucf.edu), housed in the College of Business
Administration (COBA), is a partnership between Orange
County, the COBA and the Office of Research and
Commercialization (ORC). The Venture Lab assists UCF
faculty and students in exploring commercialization of their
research results. The Lab also provides advisory services to technology companies in the community and
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assists with specific needs Incubator client companies may have. Assistance is provided with market
research, business planning, investor presentations and company formation. Education programs are
offered as well.
UCF Small Business Development Center
The UCF Small Business Development Center (SBDC)
(www.bus.ucf.edu/sbdc) is located at the Disney/SBA National
Entrepreneur Center and maintains an office in University Tech Center.
Services of the SBDC include individual assistance and regularly
scheduled training events on a wide range of business topics such as
starting a business, how to find financing, taxes, writing a business plan,
international trade, contracting with government agencies, patents and
trademarks, and e-commerce issues. Incubator clients are encouraged to
sign up as a client of the SBDC. This enables SBDC Certified Business
Analysts to assist Incubator clients. They are available for consultation on a wide variety of issues
including: business plan writing, market research, advertising, sources of financing, record-keeping,
taxes, and selling to the government. The SBDC also offers an Advisory Board Council program
(www.advisoryboardcouncil.org) providing advisory boards for small businesses seeking guidance in
growing the company. Incubator companies that have been in business for 1 year and who are
generating revenue are qualified to apply to the program for advisory services to complement those
offered by the Incubator.
The following graph shows the interaction of all these collaborating partners, more detailed scenarios of
service providing to entrepreneurs from the community and from UCF can be found in [ARW8]
Figure 7: Entrepreneurship Ecosystem Relations at UCF
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UCF BUSINESS INCUBATION PROGRAM SERVICES
The UCF Business Incubation Program provides client companies with the experience and insight
needed to create successful companies through relationships it has created with partners such as,
professional service providers, business assistance organizations, local/regional/state government as
well as their dedicated staff. The Incubator provides a variety of services such as [7]:
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The model of support of business services partners is based on the following process at UCFBIP:
A representative of a certain service provider visits the incubator and clients reserve with
him/her if they need the support. This is on a voluntary basis to service the incubation program.
Service providers understand that this is not a sales/marketing pitch and that main incubator
concern is to educate the clients.
If clients want to go further with a certain service provider, this will be managed by themselves
on a contract basis between them and the service provider directly.
There are many service providers to rotate on a voluntary basis, so that they are not exhausted
– maybe a certain service provider comes only twice a year.
Feedback from both parties is collected by incubator management after such meetings to
assess effectiveness and quality perceived about a certain service provider.
The following graph shows the number of service providers grouped per each set of services offered in
the UCF business incubation program.
Figure 8: Service Providers at UCFBIP
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INCUBATION PROGRAM PROCESS
AND
KEY PERFORMANCE INDICATORS
Figure 9: Incubation Program KPIs
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UCFBIP MANAGEMENT STRUCTURE
The following graph represents the management structure of the program and the next one details the
structure for the technology incubator facility located in the UCF Research Park with some clarified
responsibilities.
Figure 10: Organizational Structure at the UCFBIP
Figure 11: Detailed Organizational Structure of the Technology Incubator Facility
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Managing an incubator facility requires a set of competencies that can be grouped into the following
ones:
Comfortable with technology.
Networking capability – Ability to see how different people could benefit from each other.
Very good at meeting people – social intelligence – people experience.
Worked before with young startups or had his/her own startup – Entrepreneurship Skills.
Balancing different stakeholders.
Effective management/leadership skills.
Ability to coach startups in what they don‘t know - keep them focused.
UCFBIP BEST DESIGN PRACTICES
The design of the UCFBIP illustrates one of the best practices that should be taken into consideration
when designing such programs elsewhere. Following are some of these best practices design
considerations:
Figure 12: UCFBIP Best Practice of Incubators Design
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GAP ANALYSIS OF THE NIS IN EGYPT
According to the local survey research and the international study on best practices including the
UCFBIP field research study; the following conclusions were reached as gap analysis results of the
national innovation system in Egypt in the viewpoint of business incubation programs:
Figure 13: Gap Analysis of the NIS from Incubation Systems viewpoint
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THE ROLE OF SCIENCE AND TECHNOLOGY POLICY
INTRODUCTION TO SCIENCE AND TECHNOLOGY POLICY
From the study of different national S&T policies and recent research on S&T policy development [21-
44], we conclude that S&T policies are critical governmental tools for allocating governmental
budgetary resources into S&T development initiatives that support specific technology
development areas and cultural change programs towards embracing creativity, technology
entrepreneurship and innovation. As in [21], there exist two ideal types of policy approaches that tend
to appear together, although one predominates over the other.
Figure 14: What is S&T Policy?
The first is the ―Academic Approach‖, which is geared towards fostering academic research and
mainly towards universities and public research centers.
The second is the ―Business Approach‖, which attaches greater emphasis to applied research and
technological innovation processes in business.
Both approaches seek to increase and foster the production of new knowledge and skills, yet while one
aims to finance academic activities, without direct connection to short-term results, the other aims to
foster private investment and raise companies‘ level of technology, and to tie public research to the
transfer of results to the private sector. Therefore, some have argued that the best policies for fostering
economic growth and competitiveness are more closely tied to the ‗business approach’.
The business-oriented model should be applied to public S&T policies to put considerable pressure on
public research systems to address economic and social needs. The following graph outlines four major
research priority areas that should be the focus of public research systems [43], which are:
Better Health: Society places high priority on health and the treatment of disease, and R&D
budgets for health research have increased in many OECD countries.
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Sustainable development: Society also demands greater public research efforts to achieve
sustainable development. The private sector lacks sufficient resources to invest in R&D such
that new emerging technologies radically improve the way human needs are met. Sustainable
development is a now a global concern that requires international science and technology
cooperation, notable with less-developed countries and innovative approaches to the
organization and funding of research.
Enhanced Security and Safety: New technologies can respond to the increasing social
concerns about safety and security, such as the risks of transponder diffusion of epidemics, the
dissemination of biological chemical or nuclear weapons, or the spread of computer viruses and
the vulnerability of communications networks.
Cleaner environment: With the major trend of environmental decline due to economic growth,
social pressure is exerted to find new ways of manipulating nature without harming the
environment, represented by renewable energy sources and green technologies.
Figure 15: Economic and Social Needs of Needed Focus of Public Research Systems
Politics and Public Policy
The study of Politics is the attempt to explain the various ways in which power is exercised in the
everyday world and how that power is used to give resources and benefits to some people and groups,
while sometimes imposing costs and burdens on other people and groups. The study of Public Policy is
the examination of the creation, by the government, of the rules, laws, goals, and standards that
determine what government does or does not do to create resources, benefits, costs, and burdens [20].
S&T policy is a form of public policy, and today‘s S&T policies are called upon to respond to new
challenges that play a major role in the competitiveness of nations. These are [43]:
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Foster science industry linkages, notably through more appropriate forms of governance of
public research,
Ensure that IPR Regimes encourage investment in innovation
Promote the development and mobility of human resources in science and technology (HRST),
Enhance international co-operation in S&T and facilitate the dissemination and access to
publicly funded research results.
Figure 16: Current S&T Policy Challenges
These various challenges lie at the heart of current debates about science, technology and innovation
policy. Governments continue to wrestle with questions of how best to restructure and reform public
research organizations to improve their contributions to social and economic problems without
sacrificing the objectivity and independence of their advice and their ability to pursue curiosity-based
research. Governments are also working with industry and civil society to improve the attractiveness of
scientific and technological careers to students and to improve prospects for mobility. In bilateral and
multilateral settings, they increasingly work with other governments and non-governmental
organizations (NGOs) to foster international co-operation on issues of global concern [43].
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MAJOR TRENDS IN SCIENCE, TECHNOLOGY AND INNOVATION POLICIES
The global patterns of science, technology and innovation are quickly changing. What are the
implications for science and innovation policy? What steps are countries taking to boost their
capabilities in science, technology and innovation? What is the contribution of science and innovation
to growth and social goals? All these questions were studied in the latest OECD report ―OECD Science,
Technology and Industry Outlook 2008‖, which reviewed key trends in science, technology and
innovation in OECD countries and other non member economies and published in November 2008.
That OECD report has identified the following emerging S&T policy trends, which are [42]:
Figure 17: Major Trends in Science, Technology and Innovation Policies
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SCIENCE AND TECHNOLOGY POLICY AND NATIONAL INNOVATION SYSTEMS
S&T policies are concerned with the buildup of National Innovation Systems (NIS). An NIS emphasizes
the interaction of national capabilities for research with national capabilities for economic development.
Therefore science, technology and innovation policies (STIP) are focusing on Technological Innovation &
Economic Development. Where, the technological innovation is both the invention of new technology
and the introduction into the market place of new products, processes, or services based upon new
technologies [42].
A national innovation system should have:
A strong research capabilities both in its industrial and research sectors
Complete government structure for S&T administration.
Strong decision support system in S&T
Research funding programs
Entrepreneurship support and SME technological development programs
Property rights/protection laws
Technology VC/angel investors players
An educational policy that Unleashes creativity, critical thinking, collaborative learning, and
stimulates high-quality of performance.
In this regard, S&T policy must balance research for technology improvement in current industries and
research to establish new internationally competitive industries in new technologies. Below is a graph of
the proposed major components of a normal National Innovation System:
Figure 18: Proposed Major Components of National Innovation System
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However, a needed component in the society that plays an important role as catalyst in the national
innovation system is the existence of strong non-governmental organizations with missions to support
innovation and nurture entrepreneurship and technology development within the community. This forth
component is often not taken into consideration in different literature materials [45] that focus only on
a triple-helix representation for national innovation systems.
Figure 19: Role of Specialized NGOs as NIS Catalysts
In order to effectively build such a National Innovation System, the following graph outlines the priority
areas that need to be detailed within the scope of the S&T policy.
Figure 20: Scope of the S&T Policy Priority Areas
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Such priority areas need political commitment, legislative and regulatory framework, capital funding,
government support, public awareness, trained scientific personnel, and cooperation with local and
international partners. So for these priority areas the following, the S&T policy should detail:
Strategic objectives
SWOT analysis for each strategic objective
Proposed policy measure
Entity responsible for implementation
Such a comprehensive identification should allow policy makers to effectively identify critical technology
to support, the form of that support, and the mechanism by which to evaluate that support, making a
reasonable justification of the public funding put in these programs.
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CONCLUSION AND S&T POLICY RECOMMENDATIONS
Business incubators are used as tools for economic development; therefore should be viewed within a
whole SME business support national strategy. Business incubators cannot graduate sustainable high-
growth companies without effective integration with other components of a mature national innovation
system, which needs to be built and improved as outlined before.
In this regard, in order to build an incubation system, specific societal model components must be
studied and taken into consideration in order to forecast the expected outcome of that incubator and in
order to set the right policies and procedures that enable it to effectively interact with its surrounding
business, research, and governmental environment. Such a societal model with its details is outlined in
t
h
e
f
o
l
l
o
w
i
n
g
g
r
a
p
h
:
Figure 21: Parameters to Consider When Building Incubation Programs
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Taking the societal model of Egypt into consideration, the concluding S&T policy recommendations for
EGYPT out of this research are:
Figure 22: S&T Policy Recommendations
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[23] ―Science and Technology in Ireland‖, Ireland 2004 Presidency of the European Union.
[24] ―Science and Technology Policy in Iceland‖, Prime Minister‘s Office, the Science and Technology
Policy Council, 2004.
[25] ―Science and Technology Policy 2006-2009‖, Iceland Prime Minister‘s Office, the Science and
Technology Policy Council.
[26] ―Mobilizing Science and Technology to Canada‘s Advantage‖, Publishing and Depository
Services, 2007
[27] ―A Proposal for Finland National Innovation Strategy‖, Ministry of Employment Draft, 2008.
[28] ―Report on Science Technology Indicators for Norway‖, the Research Council of Norway, 2006.
[29] ―Science and Technology Master Plan of Mongolia 2007-2020‖, Ministry of Education, Culture
and Science.
[30] ―Technology Strategy‖, UK Technology Strategy Board, Annual Report 2006.
[31] ―High-Tech Strategy for Germany‖, Federal Ministry for Education and Research, 2006
[32] ―American Competitiveness Initiative: Leading the World in Innovation‖, Domestic Policy
Council, Office of Science and Technology, Feb 2006.
[33] ―Compete. New Challenges, New Answers‖, US Council on Competitiveness, 2008
[34] ―Competitiveness Index: Where America Stands?‖, US Council on Competitiveness, 2007.
[35] Philip Shapira, ―US National Innovation System: Science, Technology and Innovation Policy
Developments‖, Georgia Institute of Technology, Atlanta, USA, 2007.
[36] Andrew Jamison, ―Science, Technology and the Quest for Sustainable Development‖,
Technology Analysis and Strategic Management, Vol. 13, No. 1, 2001
[37] Carlota Perez, ―Change of Paradigm in Science and Technology‖, Number One, 2000
[38] ―Canada‘s Future in Science and Technology: Making it Work‖, Association of Canadian
Community Colleges (ACCC), 2008.
st
[39] Joseph Coates, ―A 21 Century Agenda for Science and Technology‖, Research Technology
Management, Sep. Oct. 2001
[40] Joseph Coates, ―Where Science is headed – Sixteen Trends‖, Journal of Washington Academy of
Sciences, Fall-Winter 2003
[41] Joseph Coates, ―Fourteen Technology Trends‖, Research Technology Management, Sep. Oct.
2005
[42] ―OECD Science, Technology and Industry Outlook‖, OECD, 2008
[43] ―Science and Innovation Policy, Key Challenges and Opportunities‖, OECD, 2004
[44] ―The Science of Science Policy: A Federal Research Roadmap‖, Subcommittee on Social,
Behavioral, and Economic Sciences, National Science and Technology Council, Office oif Science
and Technology Policy, November 2008.
[45] Azley Abd Razak, Mohammed Saad, ―The role of universities in the evolution of the Triple Helix
culture of innovation network: The case of Malaysia‖, International Journal of Technology
Management and Sustainable Development, Vol 6., No. 3, 2007.
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ACOMPANIYING RESEARCH WORK
This research project is submitted on a CD alongside other research documents that should be
considered as supplement research details:
[ARW1] Introduction to Business Incubation.ppt
[ARW2] Entrepreneurship and Incubators in Egypt.ppt
[ARW3] Entrepreneurship and Incubation Activities in Egypt_Report.doc
[ARW4] 1. UCF Research Commercialization Office - Top View_TS.pptx
[ARW5] 2. Disney Entrepreneur Center_Overview_TS.pptx
[ARW6] 3. UCF Incubation Program_TS.pptx
[ARW7] 4. Nile University Incubation Program Action Plans_TS.pptx
[ARW8] IAMOT2009_UCFBIP- Entrepreneurship Ecosystem Case Study_ED01.pptx
[ARW9] Paper Slides-BUSINESS INCUBATION A STRATEGIC PERSPECTIVE_TS.ppt
[ARW10] SRO_Paper_Business Incubation - A Strategic Perspective_TS.pdf
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EXHIBIT 1: BENCHMARKING ANALYSIS OF TECHNOLOGY BUSINESS INCUBATORS
2006 Benchmarking Study of European Business Incubators
NBIA 2003: A National Benchmarking Analysis of TBI Performance and Practices.
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EXHIBIT 2: KEY ELEMENTS OF BUSINESS INCUBATION ENVIRONMENT
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EXHIBIT 3: TECHNOPOLIS FINLAND SAMPLE SERVICES & PROCESS
Technopolis Finland Packaged Services
Technopolis Finland Process
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