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New Zealand improves incubator programmes for start-ups

New Zealand’s Ministry of Business, Innovation and Employment (MBIE) had recently reviewed Callaghan Innovation’s Technology Incubator and Founder Incubator programmes.

According to a recent press release, the Ministry have announced great news for the country’s innovation system as it will continue its support for both programmes, albeit some ambitious improvements.

Technology Incubator programme

The Technology Incubator programme helps start-ups commercialise complex technology like biotech and aerospace technology – largely, research coming out of universities.

These technologies are generally more expensive and take longer to commercialise, but when they do, have a significant potential for earning and job creation.

This programme will continue within a more ambitious policy framework after five years in pilot.

Lessons experienced during the pilot shall be converted into improvements that will provide world-class support to New Zealand start-ups. These include:

  1. Requiring strong commercialisation experience and access to investment from incubation providers, inviting global expertise
  2. Stronger guidelines and metrics with a serious data focus
  3. Higher repayable loan amount for new start-ups
  4. Lower percentage of management fees providers can take under the programme
  5. Alignment of projects with the Government’s wider priorities for an innovative and low-emissions economy and raising New Zealand’s levels of R&D

Founder Incubator programme

Founder Incubators are for people with great ideas. They provide services to help founders and their teams validate their ideas in the market and build a strong business around it.

They help accelerate the path to market with concentrated, core business support and extensive networks for founders.

The programme has been running since 2001 and the review found its performance satisfactory.

There are areas, however, that can be explored for improvements. These are:

  1. Scope to support entrepreneurial capability with more flexibility, which includes support for some initiatives that would not be expected to deliver direct commercialisation outcomes
  2. Opportunities for better alignment with other initiatives such as accelerators
  3. The level of funding for Founder Incubators is insufficient

Callaghan Innovation, New Zealand’s Innovation Agency, will be working closely with the Ministry in the next 12 months to address these areas for improvement.

What will happen now?

Meanwhile, services for start-ups will continue as normal. The resulting changes will be very beneficial for start-ups.

The contract changes will be implemented from January 2020, and are not retrospective.

Request for Proposals (RFPs) for Technology and Founder Incubators will be opened at the end of April 2019.

It will be open to current providers, as well as new local and international providers meeting the new ambitious criteria.

The successful providers and new ambitious contracts will be in place from 1 January 2020.


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