Budget 2013: CSR and Incubation

You cannot miss the constant buzz around entrepreneurship in our country. There is a rush towards understanding it better,budget-2013 encouraging it, providing for and protecting it.

Incubation as a method is fast gaining ground in this context. Providing for a protective environment where aspiring entrepreneurs are given support and encouragement to experiment and try out their ideas is a primary responsibility of an incubator.  Government and its various ministries are constantly looking for solutions, schemes and policy to make incubation in our country effective.

Corporate Social Responsibility (CSR) is a way by which firms give back to the society. A laudable mandate is emerging in the manner in which leading corporate are designing and executing their CSR initiatives.

While we may have many points in this budget that we can discuss, debate, predict, gamble on impact – there is one point on which most pundits seem to concur on as being positive in  policy making.

“On-campus incubators that provide money and mentoring to early stage companies will also have a new source of capital. The mandatory spend of 2 per cent of profits by companies in corporate social responsibility initiatives can now be routed to incubators – In a bid to seed innovation at the early stage” – ‘The Economic Times’

Sharing a % of profit with society is a good act. The government’s effort in providing some direction and channelizing it towards incubation is a positive policy decision.

In a recent conference on technology business incubation, there was a lot of discussion around industry—academia participation and access to capital. So there is little surprise on the positive response this point is receiving. I also agree and welcome this government mandate at the level of policy. However it did bring to my mind some questions on the implementation front:

  • A key concern that I have heard from many incubators is the lack of quality of ideas and quantity of people approaching them for help.
  • Very many times we have also heard personnel from the MSME ministry, DST and the rest talk about unutilized funds that are available to the colleges for providing support to innovative ideas.
  • For existing incubatees, scaling out of the incubation fold is a major concern. They are unable to move from the protected environment of their incubation centres to the harsh competitive environment of real-time markets.
  • A majority of our incubation centres are geared towards technology based products and services.  Should we be looking at developing incubation centres for non-technology based start-up ideas?

The intent of this writing is neither to doubt the intent of this policy nor poke holes in its implementation.  As a person deeply concerned and interested in the entrepreneurial ecosystem this just brought to the forefront some challenges we have right now on the ground.  If we fail to address these issues, this policy will fail to deliver its intended benefits!

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