Benchmarking ASEAN TBIs with Japanese Model

ASEAN COOPERATION PROJECT NO. INDSME11002REG Strengthening of Business SMEs and Technology Business Incubators 9

4.1. Outcomes of Baseline Study

The participating 29 TBI respondents, and 10 stakeholder institutions were listed in Appendix 4. Incubator managers involved in the Survey Team visiting the neighboring AMS were described in Appendix 5. The detail results of the visits to each TBI, and institution respondents in all AMS were described in Appendix 6 along with the pictures of the activity. The time for survey was spread out from December 2012 starting with Thailand to May 2013 ended in the Philippines. The condition and situation of TBI development in the AMS was significantly diverse, much depending on the government political will and support. Other influencing factors were the level of TBI development stages, the level of awareness for entrepreneurship among the university graduates, the level of entrepreneurial education in the university, the level of availability of the TBI supporting infrastructure, the level of Science and Techno Park STP development, and the availability of Venture Capitals and angel investors. TBI development seemed have strong connection with the development of Science and Techno Park STP where TBI commonly located in the STP compound. This was true for AMS who put priority in accelerating their economic progress through building the STP such as Singapore, Malaysia, Thailand, Vietnam, Philippines, and currently was being followed up with Brunei Darussalam, and Indonesia. The study classified the level of development of the TBI at AMS into to three groups: 1 the developed level at Malaysia, Singapore, and Thailand; 2 the developing level at Brunei Darussalam, Indonesia, Philippines, and Vietnam; and 3 the initiation level at Cambodia, Myanmar, Laos PDR. The criteria of the classification was based on the number of TBI founded and in operation, the government support to TBI management and operation, the government support to SMEs who are TBI clients, and the STP development Table 4.1.

4.2. Benchmarking ASEAN TBIs with Japanese Model

The benchmarking ASEAN TBIs with Japanese Model was done taking purposively the developed and developing level TBIs since the initiation would be too far behind to be compared with the Japanese model. The comparison was tabulated in Table 4.2 and 4.3. ASEAN TECHNOLOGY BUSINESS INCUBATOR MODELS 4 10 ASEAN COOPERATION PROJECT NO. INDSME11002REG Strengthening of Business SMEs and Technology Business Incubators Table 4.1. Different levels of TBI development in AMS Level of TBI Development AMS Total incubators, Unit Existing STP, Unit Availability of Government Funding for TBI SME Clients Developed Malaysia, Singapore, Thailand Over than 80 1-3 Available Developing Brunei Darussalam, Indonesia, Philip- pines, Vietnam 3-80 Seedling-2 Limited and not specific Initiation Cambodia, Myanmar, Laos PDR 0-2 None None Data in Table 4.2 and 4.3 indicated that the success of TBI development required full support from the government. Government roles in supporting the development of TBI were documented as a holistic approach covering both the TBI and the stat-ups as the SME clients of the TBI. The approach treated TBI development as the fundamental for construction of technology based enterprises that would bring an improvement of a knowledge based economic of the state. Key supports were summarized as follows 1. Provision of TBI building and continuous annual operation for performed TBI including routine activities like start-up recruitment, booth camp, business matching, and mentoring. 2. Funding seed capital for TBI start-ups, and additional investment for growing TBI clients based on competitive business plan selection. 3. Funding technology innovation cost for prospective innovator founders. 4. Encourage VC and other financial institutions to assist the TBI clients by providing specific fund for them in care of the TBI clients. 5. Formulate regulation to stimulate the business ecosystem such as tax incentive for VC and investor who make investment in high risk technology based TBI clients. 6. Help establish supporting institutions for TBI likes technology licensing office, IPR office, small scale stock market, and expert mentor network. Table 4.2. Benchmarking of Developed ASEAN TBIs with Japanese Model No TBI Characteristics Japan Malaysia Singapore Thailand 1 General Situation Year Started Total TBIs Total SME Clients Total Population, millions GDP, x 1000 USDcapita 1986 190 2375 128.05 36.2 1995 110 2000 27.56 16.9 1996 120 1800 5.08 60.9 2005 89 412 68.9 10.0 ASEAN COOPERATION PROJECT NO. INDSME11002REG Strengthening of Business SMEs and Technology Business Incubators 11 2 Government Support 1. Incubator building and opera- tional fund 2. Seed capital and investment fund- ing for SME Clients 3. Technology innovation fund for start-ups 4. VC operation for TBI SME Clients 5. Tax incentives for VC and inves- tors + + + + + + + + + + + + + + None + Only seed capital + None None 3 VC and Investors Support + + + + 4 Community of Individual Support + None None None 5 Institutions Supporting TBI Technology Licensing IPR Expert Network Stock Market + + + Big and Small scale + + + Only big scale + + None Only big scale + + None Only big scale 6 Leading Ministry in TBI Program 1.METI Min. Economy, Trade Industry 2.MEXT Min. Education, Culture, Sport, Science and Technology 1.MOSTI Min. Science Tech- nology, and Industry 1.SPRING – Min. Trade and Industry 2.NRF Na- tional Research Foundation- Prime Minister Office 1.NSTDA-MOST Min. Science and Technol- ogy 2.MOE Min. Education Table 4.3. Benchmarking of Developing ASEAN TBIs with Japanese Model No Characteristics TBI Japan Brunei Darussalam Indonesia Philippines Vietnam 1 General Situation Year Started Total TBIs Total SME Clients Total Population, mil- lions GDP, x 1000 USD capita 1986 190 2375 128.05 36.2 2004 5 30 estimate 0.42 46.0 1995 60 900 estimate 250.59 4.3 1997 10 100 estimate 105.72 3.8 2006 11 150 estimate 91.95 3.1 2 Government Support 1. Incubator building and operational fund 2. Seed capital and investment funding for SME Clients 3. Technology in- novation fund for start-ups 4. VC operation for TBI SME Clients 5. Tax incentives for VC and investors + + + + + + Limited None None None Limited Limited for only seed capital None None None Limited Limited for only seed capital None + None None Limited Limited for only seed capital None None None 12 ASEAN COOPERATION PROJECT NO. INDSME11002REG Strengthening of Business SMEs and Technology Business Incubators 3 VC and Investors Sup- port + Limited Only private Only private Limited 4 Community of Indi- vidual Support + None None None None 5 Institutions Support- ing TBI Technology Licensing IPR Expert Network Stock Market + + + Big and Small scale None + None None None No direct connec- tion None Only big scale None + No direct con- nection None Only big scale None + No direct con- nection None Only big scale 6 Leading Ministry in TBI Program 1.METI Min. Economy, Trade Industry 2.MEXT Min. Edu- cation, Culture, Sport, Sci- ence and Technol- ogy Brunei Economic Development Board 1.Ministry of Coop- eratives and SMEs 2.Ministry of Edu- cation 3. Telcom Public Company DOST Depart- ment of Science and Technology 1.Ho Chi Minh City Municipal Government For AMS having developing TBIs like Brunei Darussalam, Indonesia, Philippines, and Vietnam, the role of government to support the TBI development is still have to be exponentially increased so the TBI development could catch up with their developed partners such as Malaysia, Singapore, and Thailand. For AMS who just initiated the TBI development, a strong political will to put aside the government budget allocation in prioritizing the development of TBI is required.

4.3. Success and Constraints in TBI Operation