ESA has long been a proponent of the incubation approach for nurturing entrepreneurs and start-up businesses. It’s nearly 20 years since we initiated the ESA Business Incubation Centres (ESA BICs) to inspire and support them to turn their potent ideas into fully-fledged businesses.
And then, in March 2020, their world changed as the COVID-19 pandemic forced many to work from home, like so many others across our ESA Space Solutions network.
A year or so later, we’re all looking forward with hope to a time when we can get back to face-to-face working on a regular basis. None more so than our entrepreneurs, because human interaction is one of the core attributes of the incubation process – for companies currently being incubated, for alumni who remain a valued part of the ESA Space Solutions network and for the many organisations, businesses and investors who interact with them.
Why physical presence is the key ingredient in incubation
Much is made of the funding and support – both technical and business – offered as part of incubation, which are important elements enshrined in the ESA BIC approach. Although these are not the only things that make up incubation. If that were the case, we would have no need for physical locations across our 22 Member States; instead, we could simply run everything remotely.
A remote service that describes itself as an ‘incubator’ is, in truth, not providing ‘incubation’ at all. ‘Virtual incubation’ is a misnomer. I’m not arguing against provision of remote support systems, especially for companies that cannot, for whatever reason, base themselves at an incubator. Maybe they have potential customers and/or suppliers close to their current location or can’t uproot their families. We already provide various kinds of support for these entrepreneurs and will continue to evaluate and evolve our offerings for them in future.
However, one key element of incubation, as we know from our two decades of running ESA BICs, is the physical interaction between all the parties involved; for example, during training or at events. What we also know is that incubation is about entrepreneurs supporting each other, which often arises out of unplanned conversations. Peer learning among tenants remains one of the greatest benefits of business incubation, as also recognised by the European Commission and the Organisation for Economic Co-operation and Development (OECD). There is simply no way that a virtual setup can replicate the incredibly valuable spontaneous interactions that happen when you’re in the same place.
Some of the start-ups we work with also benefit from use of fabrication laboratories and other physical facilities provided at, or via, the ESA BICs, which they simply would not be able to access otherwise. Those cannot be provided virtually, of course.
Whether or not they are trying to take advantage of start-ups, organisations that have no physical presence but instead offer remote training courses, email introductions to potential vendors, and so on, are not truly offering ‘incubation’. If a remote solution is what a start-up needs, for whatever reason, then bravo! Start-ups can be vulnerable and some entrepreneurs are not always very business-savvy just yet, so it is imperative that we label things correctly. Paying a third party to provide you with merely training and networking services is not incubation.
Staying true to the incubation definition
True incubators are part of a regional economic development strategy and ESA BICs follow the definition of a third-generation business incubator where besides shared office, lab facilities and in-house business support, the access to a professional service network is also offered. ESA extends that definition in that the entrepreneurs produce global solutions using European space assets, such as satellite data, hardware or software that was originally designed for space applications. At the same time, their success provides huge regional benefits, such as employment and increased economic activity, which is why our incubators are co-funded by regional funders.
We know that the pandemic has proved many aspects of business can be done successfully in a virtual way. However, incubation is about creating a start-up community where people are encouraged to interact and share knowledge and resources, and support each other. The way we run our incubation may alter in future in terms of the facilities and events. Also keeping in touch with our alumni community is something where a virtual environment can definitely support beyond the conventional way of social media platforms. The concept of creating a fertile starting culture to provide a powerhouse for entrepreneurship through dedicated incubation in physical ESA BICs will remain.
Cornelis (Niels) Eldering, Head of Section ESA Space Solutions
ABOUT ESA SPACE SOLUTIONS
ESA Space Solutions is the go to place for great business ideas involving space in all areas of society and economy. Our mission is to support entrepreneurs in Europe in the development of business using satellite applications and space technology to improve everyday life. ESA Space Solutions is designed to provide multiple entry points such as ESA Business Incubation Centres (ESA BICs), ESA Technology Broker Network, ESA Business Applications Ambassadors and ESA Business Applications programme. Funding typically ranges from €50k to €2M and supports everything from technology transfer, business incubation, Feasibility Studies to large-scale Demonstration Projects.