New Delhi, Nov 6 (KNN) There is a need for separate incubators to help the manufacturing SME sector innovate, according to the recommendations made by the expert committee set up by the Niti Aayog on Innovation and Entrepreneurship. The report also said that the one-size-fits-all approach does not work when it comes to incubation.

Finance Minister Arun Jaitley, in his Budget Speech 2015-16, announced the Government’ s intention to establish the Atal Innovation Mission (AIM) in NITI and stated that initially a sum of Rs. 150 crores would be earmarked for this purpose.

The overarching purpose of this mission is to promote a culture of entrepreneurship and innovation in India. In the years to come, entrepreneurship and innovation is expected to be an ever more important source of growth and job creation
Accordingly, NITI Aayog constituted an Expert Committee headed by Prof Tarun Khanna for working out the detailed contours of the Atal Innovation Mission (AIM) and SETU.

The report by the expert committee recommended to, “Introduce specialized sector-based incubation services.”

“Since different sectors throw up unique challenges, the one-size-fits-all approach does not work when it comes to incubation. For example, currently, ecommerce ventures receive greater interest and funding offers. Therefore incubators focused on e-commerce must strive to improve the quality and mortality of these start-ups.”

On the other hand, sectors like social inclusion, healthcare, education and clean technology do not attract sufficient attention and incubators should work on increasing awareness, and getting more entrepreneurs & investors involved, which will also boost innovation across these crucial sectors. Separate incubators are required to help the manufacturing SME sector innovate, it said.

On the business incubators, the committee recommended to increasing the amount of funding going into business incubators.

The total amount of funding going into business incubators is miniscule in relation to demand for financing. A target of up to INR 200 crore per year should be set for public investment in incubators in the initial years. Efforts should also be made to rope in private sector funding. CSR funds, for instance, could be at least partially directed to incubators. Apart from the need for more funding, there is also a need to monitor efficiency of spending and impact, said the report.

The report sought for creation of ‘Virtual Incubators’.  “Curated sites should be set up to provide entrepreneurs with access to advisors, mentors, and experts. These sites should also include information on how to access funding, how to navigate the regulatory landscape, and e-education. The purpose is to raise the odds that even those in remote/ inaccessible areas to launch their own businesses.”

The report suggested keeping incubators Up to Date, “Incubators must be able to provide services and facilities most in demand with current market and business conditions. Key decision-makers and managers must routinely study and survey the needs of the entrepreneurs, as these are constantly evolving, and offer the best they can to help the incubated ventures succeed.”

Other recommendations made by the committee include - Linking funding with an Institutionalized Annual Ranking; Exit of Non-Performing Incubators; Moulding a Supportive Incubation System to Encourage Disruptive Innovation; Strengthening Links between the Corporate Sector and Incubators. (KNN Bureau)