PROMOTING BUSINESS INCUBATION

In its first year of operations, the National Business Centre (NBC) under Public Establishment for Industrial Estates (PEIE) is facilitating and supporting the growth of at least 20 investable ideas into successful businesses, says NBC’s Director General Malak Al Shaibani. Akshay Bhatnagar reports with inputs from Gayatri Salian .

Excerpts from the interview:

How do you look at the recent establishment of the Public Authority for Small and Medium Enterprises Development (PASMED)?
It is a welcome move. It was one of the key recommendations proposed at the Bahla Symposium for SMEs. I believe the Public Authority will be looking into micro and macro programmes and policies to support SMEs. In countries such as Malaysia, the experience of the establishment of a Public Authority dedicated to developing and nurturing SMEs has been very successful.

The newly created Authority will be more effective compared to a directorate in a ministry since it will have its own financial and administrative independence. This will also allow it to work with many organisations since SMEs work across many sectors. Moreover, SMEs have to be the part and parcel of economic development. And hopefully, this authority will be able to develop and implement the master plan for SME development.

Do you think the National Business Centre (NBC) will be integrated into PASMED?
At the moment I don’t think so, but generally, in other countries, incubation programmes like NBC are kept separately from the SME Authority. The incubators are enablers and they can be sector focused, such as industry, IT, services and can be supported by the public, private or even academic institutions; it all depends on the objective of the incubator in the first place. Since incubators are very focused and develop expertise in a specific area, it makes more sense that an industrial incubator is located close to industry and benefits from industrial expertise. In addition, the set of targeted services that incubators provide is very different from what an authority can provide. You also want the authority to focus on macro level policies, sectorial studies that enhance and improve the eco-system and develop expertise in this area.

The goals are common to the NBC and the authority but our mandates and scope of work are entirely different. Having said that, we would be more than glad to have the authority’s representation on our board.

What is your advice generally to the aspiring entrepreneurs?
Many of them have a business idea, but they don’t know how to develop it into a business plan. They don’t know how to start or run a business or source the resources to make a product or solution, package it and market it. Most importantly, as they are very passionate about their idea, we don’t ask them to change their idea; but explore it a bit further using data and information that are easily available. We stresses the importance of conducting a market study to identify the target market and competition so that they know what makes their product or service unique so that they can make the right beginning. Unfortunately, sometimes there is not enough market data available. Whatever is available is outdated and at times, misleading so we have to look for alternatives. While doing some research on the manufacturing industry, we found there was a huge discrepancy between the number of registered and operational companies in manufacturing. In fact, we couldn’t locate two-third of the registered companies, because either they were non-existent or were classified wrongly. In the absence of basic numbers, how can you plan? I think the new authority would address this issue; it will be a great service to the entrepreneurs.

What is the brief to you at NBC?
The NBC was set up earlier this year in Knowledge Oasis Muscat (KOM). This was an extension of KOM’s business incubator programme – The Knowledge Mine (TKM) – inaugurated almost 8-9 years ago. The TKM has been merged with NBC. My brief has been to make NBC a successful and effective centre to promote and develop SMEs by providing physical facilities and value added services, capitalise on linkages with industrial areas and the private sector to target budding entrepreneurs from universities, individuals and even retired Omanis.

We aim to facilitate and support the growth of investable ideas into successful businesses; build entrepreneurial skills through dedicated and focused training, coaching and mentoring; and provide business support facilities from office space, administrative support, financial support and consultancy services that are crucial in ensuring the success and survival of new ventures.

What is the current status of NBC?
It is still early days for us as we have not yet reached the stage of full-fledged operation. By end of June, the NBC wing will be ready in KOM 4. Once ready, we will have space for 20 offices. Each office space would accommodate between two to four persons. Currently, we have 12 incubated companies with us. In addition, we have three projects in pre-incubation stage in areas of advertising, cyber/IT crimes and IT systems for small restaurants. Their idea owners are currently doing the market study and haven’t yet reached the business plan phase. At this stage, they don’t need any office space. We are assisting them in their study and providing counseling to them. In addition, we plan to hire more staff at the centre.

What is the background of the people behind these incubations?
They are mostly graduates in different fields with a couple of years of work experience. Interestingly, most of them have business ideas not related to their educational qualifications or work experience. For example, one person from a sales function in a large telecom company is working on setting up a company to provide IT systems for small restaurants.

Generally, one should have an experience of the field before entering it as an entrepreneur. It is always advisable. The key to the success of an entrepreneur is his/her competitive advantage to succeed in the market. If that advantage relies heavily on an employee and if that employee leaves the enterprise, it will be very difficult for the entrepreneur to survive and retain the competitive advantage. I’ve seen this more often in the IT space where an entrepreneur enters the business without having any/adequate knowledge of the industry. And he/she relies heavily on expatriate employee(s). The competitive advantage should be based on the product or service offered and the entrepreneur should have a good knowledge of it. We don’t encourage entrepreneurs who are reliant solely on their expatriate employees for success. They need to understand their business and know it very well in order to succeed.

Can you tell us about the incubations which are in maturity stage or have graduated from the incubation programme?
We have many such cases. We have an environment consultancy firm ‘Mazoon Environmental & Technological Services’ cofounded and run by an enterprising professional woman, Rayan Al-Kalbani. Another good example is Lab Scientific and Laboratory Supplies run by Jassim al Ma’mary. In a tie-up with international majors, the company provides fine chemicals, human body models and consumable products for medical research and study, and business applications. Another exciting prospect that we are assisting is Deema Oman. It is a branded fashion accessory venture of designer Shadya bint Salim Al-Ismailiya. She designs and sells dinnerware, jewellery, home linen and a variety of corporate gifts. She has just bagged a prestigious contract to design and make exclusive dinnerware for a high-end store in the United Kingdom. In addition, Deema Oman has been chosen amongst 12 designers worldwide to attend the 150-year anniversary celebration of Rolls Royce that will take place towards the end of this year in London. Deema is not incubated with us but we continue to support entrepreneurs like her and others who may not need incubation or may need just virtual support.

Such entrepreneurs don’t require much handholding; it is more of us promoting them and providing them with platforms to network. We provide an acceleration programme to these in graduated companies as their needs are different from those who are still in incubation stage. Their needs are more focused and we help them in terms of developing the company’s vision, increase market penetration and boost exports so that they could move on to a higher growth path.


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