A cornerstone of the strategy for sustainability of the results of the Horizon 2020-funded project MediaMotorEurope and a real vision for an ongoing partnership with the partners in this project, the Cluster Sofia City of Knowledge envisages the creation of a cluster innovation accelerator. This short article discusses the model of the accelerator, the reasons, and prerequisites for its creation.
The Innovation Accelerator at the Cluster Sofia Knowledge City (Inno-Accelerator) is an open-innovation business initiative (project) of a group of cluster members to create a mentoring program and other financial and non-financial instruments supporting the development and commercialization of innovative business ideas in the smart cities market and the creative and media industries. Any member of the cluster organization can apply for participation in the project.
The Inno-Accelerator is an entrepreneurship project that will not only contribute to solve the challenges of urban development and creative industries in Sofia and the country by encouraging the development of innovative startups in these sectors, but at the same time will provide sufficient return to its investors.
At the heart of this initiative is the experience gained and the concrete results of MediaMotorEurope project, under which the partners developed and implemented a mentoring program to support 60 deep-tech startups and scaleups from many EU countries working in the creative and media industries.
The new accelerator will be backed by an international network of proven and trusted professional mentors from Bulgaria, the Netherlands, England, Belgium, Portugal, Greece, and Norway. It will operate as part of a network of four Innovation Hubs in Sofia, Thessaloniki, Brussels and Bergen to provide services to high-tech companies in the creative and media industries for Europe. This network has the potential to expand, which will enrich access to a common resource of knowledge and good practices in technology entrepreneurship. It will also be a good prerequisite for attracting investors for successful business ideas and enterprises that have passed through the accelerator.
The Inno-Accelerator is a cluster accelerator, necessary for achieving the goals of the cluster organization and contributing to accelerate the “maturation” of the innovation ecosystem in the city. In this respect, it is close to the so-called corporate innovation accelerators operating on the principle of open innovation. The emphasis is on breakthrough technologies related to the digital transformation of cities, but not only.
What is an accelerator?
In general, the classic accelerator is a program that provides support for promising and proven business ideas to achieve rapid growth and scaling. Support can take the form of resources (people and money), mentors, connections and knowledge. Unlike the business incubator, which is a program for growth and mentoring of business ideas at an early and still insufficiently validated phase of development, the accelerator enters into action at a later stage in the development of a business concept.
Types of accelerators
Accelerators are generally of two types:
1. External accelerators or growth support programs for new companies, funded and managed by public or private entities, where startups receive equity and have some time to show business results (e.g., the Y Combinator accelerator).
2. Internal (corporate) accelerators or support programs that are funded and operated by companies (corporations). They support the development of internal business ideas, sometimes in exchange for equity (e.g., Google Ventures).
Here we will focus on the second type of accelerators. The companies (corporations) that create such accelerators are most often leaders in the managing innovation in an industry and/or market. They develop growth programs that provide support for innovative business ideas (startups) developed or attracted by the corporation to accelerate the commercialization process and achieve rapid growth and scaling of important key technologies and sometimes even disruptive innovations.
In addition to the mentoring program, they include an open platform for input, evaluation and screening of innovative ideas from the external environment and internal structures of the corporation, appropriate mentors, internal team for training, prototyping and validating the selected business ideas, managed through internal procedures.
Such accelerators encourage the development of internal ideas for innovations (entirely new and/or even breakthrough products, technologies, business models), which receive financing in equity from the company itself. In the figure can be seen a typical accelerator as published by Evangelos Simoudis in his article “Using Corporate Incubators and Accelerators to Drive Disruptive Innovation”.
Examples of corporate innovative accelerators with extensive practice are: Siemens Technology Accelerator; Nike + Accelerator; Media Camp Academy; The Microsoft Accelerator; Volkswagen Electronics; Research Lab technology Accelerator; Kaplan EdTech Accelerator.
Cluster innovation accelerator – Inno-accelerator
The Inno-accelerator is a structure, initiative, project or program to an industrial cluster, which aims to accelerate the innovation cycle (time to market) in the early stages of development of an innovation, designed for commercialization. This is a tool to facilitate the start-up and development of business by already created or in the process of establishing startups by cluster members and startups that are accepted as members of the cluster ecosystem. The accelerator organizes cohorts of such startups in order to include them in training programs, mentoring and providing start-up and development capital by interested internal (in-house) and/or external investors.
The Inno-accelerator is a hybrid accelerator, i.e., it has some elements of external and other elements of internal, corporate accelerators. On the one hand there is a synchronized internal program to support the development of business projects, concepts and business ideas in the cluster, and on the other hand because the cluster organization is not a corporation that has its own capital flows, the method of financing is provided by external and internal sources. External sources include private equity, business angels and venture funds, as well as grant schemes and crowdfunding. The internal financing is through the members of the cluster, who invest in their own or in attracted externally or internally business projects indirectly, i.e., through an established intra-cluster fund.
Why Cluster Sofia City of Knowledge offers an Inno-accelerator?
The cluster was created to unite the efforts of those players (science, business, and education) who have an interest in stimulating the development of the market of scientific products, innovations, and smart technologies to be integrated into the development process of the city of Sofia.
The cluster is interested in creating an Inno-accelerator because:
1. Rapid development of the market of smart city technologies in all agendas of the city is forthcoming, and the fastest, most flexible, creative and efficient are the high-tech startups. The accelerator will not only support startups with mentoring but will also shorten the innovation cycle through the so-called living labs for prototyping and validation laboratory based on an internal partnership and will provide networks for accelerated market entry.
2. The innovation strategy for smart specialization and the strategy for digital transformation in the city of Sofia focus on the ICT sector and the creative industries. This implies the gradual mobilization of additional funds at the international, national, and local levels needed to implement these strategies, which will inevitably increase that willingness to invest in such sectors. The accelerator will be a convenient way to reduce the risk of investing in startups, which implies more and more diverse “financial instruments” providing financial security for the cluster.
3. With the gradual “organization and integrated planning” of the city of Sofia is expected to increase the number of smart city projects. This will increase the need for technological solutions, most of which are part of the component supply chain for larger urban projects. The ecosystem of the cluster, in the center of which the innovation accelerator should be positioned, will play the role of a “breeding ground” for innovations that are the basis of smart cities.
Inno-accelerator is a proper way for developing the cluster deep-tech ecosystem. The Cluster Sofia Knowledge City has all the elements, assets, and prerequisites like MediaMotorEurope project results to develop and implement this program by providing the necessary internal cooperation between cluster members and attracting stakeholders and especially proper investors to achieve this goal.