Why is it the shine seems to have gone off corporate R&D? Everywhere I go the once mighty laboratories of the global giants seem tarnished and semi-disabled. And the new style seems to be to outsource R&D, or better, buying newly developed technologies from small companies just about to make their first profit. Well, apart from the historical disconnection between boardrooms and the technical and scientific brains able to create fundamental change leading to new sources of wealth, the dotcom boom and the rise to the networked economy seem to have inflicted a near deathblow. Excluding the university sector from the argument, the rise of the incubator - a new model designed to get ideas to market faster and more efficiently - seems to have been a primary cause. Everywhere I go individuals and companies are setting up incubators on the largely correct premise that small is beautiful and fast. For the corporates it is a bid to break the mold (or mould), to get vitality, action and speed back into to organizations running in a treacle of bureaucracy. So what else brought about this seed change?

For over a decade it has been evident that innovation and operational aspects of corporations are increasingly uneasy bedfellows. Operational people are anally retentive and besotted by process and procedures - nothing must disturb their business and customer relationships. Press a button and everything has to be tried tested, bolted down rock solid, and totally prescriptive. This makes corporate operations very happy, and in 99% of cases, likewise the customers. In R&D however people can generally characterized as out of the box and out of control to a lesser or greater degree. They are fired up by changing the world - usually someone else's - and most often are non too keen on anyone changing them or their environment. At the extremes this creates a mutually exclusive world inside the limited universe of a single company. Between research and operations there is a gray scale of mindset diversity with those who make things happen, those who watch things happen, and those who wonder what happened.

Unfortunately researchers are not loved by the anally retentives who control the funding. So to avoid a death of a thousand financial cuts, breaking R&D out into an incubator, or people leaving companies to set up their own incubators is a natural and understandable consequence. But it is compounded by the fact that the innovators, the techies, have seen everyone else getting rich except themselves. Whilst sales and marketing enjoy a big fat bonus for getting that $M dollar sale, the R&D folks enjoy yet another certificate and plastic pen. Well this situation boiled over in the USA first and the incubator model was born. The prospect of the individuals getting rich is a vital element to the success, take that away and failure is guaranteed. It can also be a huge negative force when it contains ideas and discoveries because teams don't want to share the prize or risk losing % points.

Right now the downturn of the money markets, and the uncertainty of the hi-tech sector has seen the popularity of Incubators plummet. But this is certainly not so for the people trying to get new technologies and ideas to market, and increasing numbers of IT companies are building their own funds and incubators. So what are the necessary elements for success?

First of all ideas, concepts, technologies and markets have to be sound, and semi-mature. The teams have to be totally rabid about getting to market, and ideally need a considerable experience to ensure success. Smart funding is also essential - there is nothing worse than dumb money, or too much money. Angels and VCs who pour funds in and then become spectators are the very worst, it is essential they come with a network of contacts and connections to support and assist the new start - especially in the early phase. The biggest threat to success however comes from people inside corporations who see the incubator as a threat. Without strong financial control and the wisdom of large numbers of people who know nothing, how could any of this succeed? So the most lethal act is to inflict and infuse corporate management into an incubator. They immediately demand too high a % for the parent company, invoke controls that kill the necessary freedoms, limit movement and relationships to ensure the techies cannot get rich. Incubation should really be called outcubation, because it does mean something new and alive, and is about wealth generation in the broadest sense - money, employment, business, intellectual property, and most importantly - a networked economy.