The tangible benefits of the technology incubator take the form of
reduced costs for facilities that would otherwise be too expensive for
the new firm. Incubator resident companies consolidate
purchases achieving economies of scale, e.g. the sharing office supplies,
fax machines, copiers, ethernet wiring, T1 internet access, voice mail,
janitorial services and, in the instance of the Austin Technology Incubator,
even videoteleconferencing equipment. Even the cost of the receptionist
is spread over 20 some-odd firms. Additionally, incubators provide startup companies
with subsidized rents set much below the industry averagethat increase gradually with tenure.
This is the area where the incubator provides an economically valuable
service. The incubator becomes a repository of start-up experience,
in effect making the start up process more efficient, leaving a new enterprise
to stand or fall based upon its merits. This Know-How Network smoothes
the noisy road to viability faciliting the commercialization of new
technologies. More precisely, the "know how network" is a formidable assembly
of contacts from business, academics, and government. These contacts
can help avoid many of the pitfalls other start-ups encounter and help
maintain a stronger base of operations. In some respects, the new
firm uses the incubator as a fulcrum , leveraging the Know-How Network.
The firm becomes a focal pointfor the convergence of minds from govt, the business community and academia. In effect,
the start-up process learning curve has been faced by the incubator, leaving
entrepreneurs, who are more likely to have scientific, rather than business
backgrounds, free to concentrate on more substantive difficulties.
In addition, incubators provide consulting and value added services.
For instance, one of the major costs for companies are related to the several
different requirements that inevitably face businesses in a market economy.
That is, a firm must address areas such as accounting, finance, marketing and
sales, in addition to the research and development and manufacturing divisions
necessary for high-tech companies to succeed. Generally, entrepreneurs
are more knowledgeable in the area of their discovery (i.e. science). Incubators help eliminate the added expense of hiring
employees in the "Business" areas by providing many of these services in
house, through incubator professionals who have encountered the most common
problems inherent in the start-up process.
The Austin Technology Incubator is linked to the University of Texas
at Austin through the Center for Commercialization and Enterprise (C^2E).
C^2E is the application arm of the University's world renowned IC^2 institute.
University professors form one aspect of the know how network.
Furthermore, Academics in the social sciences are allowed access
to the incubator for research. Aside from the institutional
memory of the incubator, the work of these social scientists could
lead to greater level of innovation in organizational structures, marketing
techniques, and general business processes.
Access to Interns and Professors:
Another important resource each of the incubator companies has is
access to university interns and professors. Many times interns can
accomplish the goals of the individual incubator companies at a fraction
of the price of a full-time employee. Also, through universities,
incubator companies can gain both technical and general advice and knowledge
through people on the cutting edge of technolgy without spending time and
money on research or hiring someone with the knowledge. Here, incubators
bridge the gap between pure research and social science. This encourages
innovation through research in the inadequately funded social sciences
while leveraging research and discovery in the highly funded pure sciences.