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High Technology Incubation Model

Incubation & Incubation Centres

High Tech Incubation Model

Stage 1: Selection Criteria

The client selection criteria for the High Technology projects is different from the selection criteria for Low Technology clients. At the core of the selection criteria will be the following basic determining factors:

  • Whether the project has potential to create a high number of jobs and revenue,
  • Whether the Chemistry involved is either innovative, new to the country, new to a province or new to a city as well as whether the project will lead to import substitution,
  • Whether the technology is post research phase, i.e. the technology of the process and/or product must have at least been proven at laboratory scale,
  • That the market potential must be clearly demonstrated,
  • That the business must be potentially profitable,
  • At least one entrepreneur/champion involved, and
  • That the business must be a SME as defined by the Department of Trade and Industry, a group of partners or a single entrepreneur.

The selection criteria will form the analysis of the idea which will be the core activities under pre-incubation. This will be undertaken internally using the High Technology Incubator staff.

Stage 2: Incubation Stages and Services

Once the client meets the above mentioned selection criteria, they will be signed into the incubation programme. The incubation stage will be a stage gate process where each stage will have to be completed before progressing to the next stage. The incubation programme will be separated into three critical incubation stages of the client. These are:

1. Analysis and Validation Stage: The stage will be undertaken internally by Chemin staff with information provided by client in some instances. The stages involves the research into the idea on the following critical issues:

a. Technology audit to determine the readiness to commercialise,
b. Market assessment to determine the market potential of the business,
c. Techno-economic evaluation to determine the commercial aspects of the business,
d. Business structure to determine the best commercial vehicle,
e. Formulation of a business case document (Pre-feasibility document) and project plan for the incubation of the client.

2. Development Stage: The development stage will be undertaken through funding available within Seda, utilising Chemin’s laboratories or contracted out to reputable institutions. This stage will be financed through the Seed Fund. In some instances Chemin will apply for funding from SPII, THRIP and TIA to complete this stage. In some instances, Chemin will see the early engagement of potential funders such as IDC, NEF and the Development Banks’s Green Fund. The bulk of the activities are outlined below:

a. Undertaking technical feasibility studies,
b. Undertaking proof of concept or production of samples or prototypes,
c. Product testing to ensure compliance with established product quality standards,
d. IP Management issues,
e. Process of product refinement,
f. EIA and Waste management License issues,
g. Product registrations, bar coding or development of product and company marketing materials, and
h. The end result must be a completed feasibility report.

3. Commercialisation Stage: For Chemin, the commercialisation stage will result in the full banking (financing) of the project by any of the funders available in South Africa. This is the last step before graduating the client and will result into the full realisation of the Project Implementation Cost (CAPEX) for the project. The following activities will be undertaken jointly with the client at this stage:

a. Development of raw material plan,
b. Development of marketing strategies as well as marketing plan for the client,
c. Development of the bankable business plan, and
d. Handholding the client to solicit access to finance and/or government incentives.

The Chemin High Technology Incubation Model is graphically replicated in Figure 2.

Stage 3: Graduation Criteria

The graduation criteria for Chemin high technology clients will be as follows:

  • That the client has been fully funded to the levels envisaged in the bankable business plan,
  • Consequently, the client is now able to engage at their own costs the required human resource skills needed in the business, and
  • That the client has secured sufficient markets for the business and the revenue generated by the business is stable and sustainable.

Stage 4: Post-Graduation Support

Chemin provides access to networks and conferencing services where clients are invited to exhibit their products at all platforms available to the incubator.