Establishment of Entrepreneurial Incubator at Ghana Space Science and Technology Institute (GSSTI)

An entrepreneurial incubator is a type of business incubator whereby entrepreneurs or a group of entrepreneurs are nurtured to bring new and innovative ideas to the market thereby creating social and economic wealth. The word “entrepreneur” used in the context of this proposal includes individuals willing to create their businesses (i.e., aspiring entrepreneurs). A very useful definition of business incubation is “it is a unique and highly flexible combination of business development processes, infrastructure and people, designed to nurture and grow new and small businesses by supporting them through the early stages of development and change”.

In the incubator, entrepreneurs are given logistical, moral, and social support to develop new ventures. Entrepreneurial incubators help mitigate several avoidable risks faced by start-ups. This helps increase the success rate of new ventures. Aside from the creation of new enterprises and enhancing enterprise viability, incubators also accelerate enterprise growth, create jobs, and improve the enabling environment. In research institutions, business incubation can act as a mechanism for researchers to pursue commercial applications of their research without having to stop researching or deviating from their core mandate. Besides, business incubation can help research institutions further develop their research into commercially viable products.

Business incubation has been around for decades and has proved to be an effective tool in creating new enterprises and growth. The concept of providing ‘business assistance services to early-stage companies in shared facilities’ started to emerge in the USA in the late 70s and grew more rapidly during the 1980s. In the 2000s, business incubators have been rapidly adopted by many nations of the world including Brazil, England, Australia, New Zealand, China, Korea, India and others. In India for example, significant support in initiating Business Incubation and its evolution comes through the Department of Science and Technology (DST). India’s DST pioneered this effort in the 1990s with the setting up of Science & Technology Entrepreneurship Parks (STEPs) and more recently Technology Business Incubators (TBIs).

On the other hand, as of April 2017, the UK had 205 active entrepreneurial incubators with the majority of them focusing on digital technology. The United States also had lots of technology-based Business Incubators in universities across the country. In the African context; South Africa for example, started Business incubation as far back as 1995. Brazil is one of the few countries where Business Incubation has been tracked extensively. It has been estimated that over a period of 20 years, Brazilian Business Incubators graduated 1,500 enterprises and generated 33,000 jobs, representing an average of 22 jobs per enterprise. Also, over a period of 20 years, the government of Brazil invested 150 million reals in business incubators and technology parks and generated 400 million reals annually in taxes. Ghana can also boast of few private Business Incubators such as Meltwater Entrepreneurial School of Technology (MEST) in Accra. MEST was founded in Ghana in 2008 and has about 4 hubs across Africa (https://meltwater.org).

The above success stories directly indicate that Business Incubator is the right thing to do to achieve long term sustainable economic development. As Ghana Atomic Energy Commission (GAEC)/ Ghana Space Science and Technology Institute (GSSTI) strives to increase internally generated fund (IGF) to support research and innovation, then Business incubation is one of the sure ways to go. There are several ways GAEC/GSSTI could gain income from hosting Business Incubator. One approach is equity in successful ideas that come out of the Incubator and become sustainable business.

The equity payment is normally based on the total value of office space, infrastructure and consultations provided to the entrepreneur during the early stages. In future when such business break even, this can result in consistent income for GAEC/GSSTI. On the other hand, GAEC/GSSTI can charge entrepreneurs for the use of goods and services through long-term contractual agreement. In the early stages, entrepreneurs may not be able to pay for such payments due to lack of cash flow. Such payment can be differed until entrepreneur’s venture is in a good position to make such payments. However, in both cases of revenue streams for the institution (GAEC/GSSTI in this case), there is always the risk that the business may fail before the cost of incubating the entrepreneur can be recuperated. Nonetheless, over time as in the case of Brazil, successful entrepreneurs may compensate for those that are not successful.