Asian incubators lack proactivity, specialization
SINGAPORE--Incubators in Asia are not proactive in helping foster an innovative culture, especially in early-stage, and are not specialized enough to focus on a single technology cateogory. They should also aid startups in striking the balance between earning a profit and making a social impact.
According to Johnsee Lee, chairman of developer center for Taiwan's Development Center for Biotechnology, incubation is currently at a "complicated" stage in the Asia-Pacific region. The center is a non-profit organization which aims to accelerate Taiwan's biotech and pharmaceutical development.
Speaking at a panel discussion at the National University of Singapore here Friday, Lee explained the commercialization of high-technology products typically takes a long time and many startups are still focused on product research and development in their early-stage. However, incubators do not provide adequate support to startups and are not "proactive" in these areas, he noted.
The role of an incubator goes beyond providing facilities for startups to develop their product, it also requires them to go out and identify good projects where the startup's products can be used, he explained. In Taiwan, for instance, incubation in biomedical science parks not only have laboratories for product development, but also facilities for toxic tests, clinical trials, along with legal and financial services to aid startups, Lee pointed out.
Another panelist on the forum, Chen Dongmin, dean of school of innovation and entrepreneuership at Peking University, added incubators in Asia were not specialized enough. Instead of incubators which specialize in various types of high-technology products, there should be incubators focused on specialized technology so they have the right resources and research to spur greater innovation, Chen noted.
In China, for example, there are incubators with experience to help startups specificially in pharmaceutical, biomedical, and rare earth research. Such specialized incubators are especially important to drive innovation in China, he pointed out.
According to a United Nations report released in July, Singapore ranked third as the world's most innovative countries while Hong Kong came in 6th and China 35th. The U.S. placed 10th.
The commercialization of high-tech products will bring big opportunities in Asia due to the region's large population and individuals with "high growth aspirations", observed Bernard Yeung, professor in finance and strategic management at NUS business school, who was also panelist.
In order to maintain the ecosystem of risk-taking entrepreneurs and investors who "trust" their abilities, hence, fostering an environment of innovation, these hurdles need to be removed, Yeung said.
Product without social impact not feasible
While it is important for entrepreneurs to spot opportunities in the potential markets to create their products, the social aspect must not be neglected, remarked Jesper Sørensen, professor of organization behavior at Stanford University's Graduate School of Business.
Products should not be created to simply make money and earn profits, but must also benefit society, or it will not be possible for startups to be sustainable in the long run, Sørensen noted.
His view was reinforced by Frank Levinson, founder and managing director of Small World Group, which invests in startups and non-profit ventures. Levinson said he would not invest in a product which was simply started to generate profits, without long-term impact to society, because there is "no way the product will be able to continue".
This is where incubators and investors can come in and educate budding startups, Vineet Rai, founder and CEO of India-based asset management firm, Aavishkaar Venture Management Service.
Startups, incubators, and investors can discuss and make decisions about the impact of their products on society, and harmonize both aspects of commercial and social returns, Rai noted. "Incubation and venture capitalism are not uniformed, you must find new ways to reach society with your technology, and deal with them," he said.