Nature of entrepreneurship, innopreneurship and enginpreneurship

In July 2020, the cover story in the Journal of the Hong Kong Institution of Engineers (HKIE) introduced “Enginpreneur Hub” (EP Hub) which aims to enhance the innovation ecosystem in Hong Kong and to drive members in their ongoing pursuit of innovation in the city. “The EP Hub will help to transform the ideas of passionate engineers whether for products or services into reality,” said Ir Professor Yuen (President, HKIE)¹. What is the difference among Entrepreneurship, Innopreneurship and Enginpreneurship?

Oxford English Dictionary defines entrepreneur as "a person who makes money by starting or running businesses, especially when this involves taking financial risks." Entrepreneurship and innovation are mentioned in many management books, especially by  Peter Drucker (1985) who stated, “Inherent in the managerial task is entrepreneurship that making the business of tomorrow. Inherent in the task is innovation.” Drucker also mentioned that two entrepreneurial functions are marketing and innovation.²

CityU Innopreneurship Ecosystem is a brand and  new idea developed with the launch and smooth execution of five key entrepreneurial support for CityU community including Innovation Commons, SEEDS (Student Early Entrepreneurship Development Scheme), TSSSU (Technology Start-up Support Scheme for Universities), CityU Incubation Scheme in collaboration with Hong Kong Science and Technology Parks, as well as, CityUE (CityU Enterprises Limited) Investment Fund. The Launch Ceremony of CityU Innopreneurship Ecosystem was held on 23 November 2015. Based on the new focus of Innovation and Entrepreneurship, we employed the term “Innopreneur”

Similarly, HKIE focus on Engineering and Innovation through EP Hub for closer cooperation with various professional bodies, universities, incubation parks and other relevant organisations aims to encourage information sharing and networking among engineering innovators (See Fig. 1). The term “Enginpreneurship” could be simply interpreted as “Fostering Engineer to be Entrepreneur in the Innovation Way of Engineering”.

Figure 1: HKIE Forum on Hong Kong Innovation and Technology Development (30 January 2018) and CityU Innopreneurship Ecosystem Launch Ceremony (23 November 2015)

Hong Kong startup ecosystem from university to accelerator

The whole startup cycle from university to incubator and accelerator, Angel / Venture Capital (VC) funding and finally to Initial Public Offering (IPO) is shown in Figure 2. The stages of technology development along with productisation and commercialisation are stepping through Technology Readiness Levels (TRL) and different phases of fundraising. However, startups usually face two valleys of death. The first valley of death happens when turning the technology into prototype and producible product (pilot and mass production) at reasonable cost that fails and we name it as “Technological Valley of Death”. The second valley of death occurs when the product does not have an existing market andcannot create a new market in any reasonable time and we call it as “Commercialisation Valley of Death”.³

The European Union Horizons 2020 Framework Programme for Research and Innovation identifies nine Technological Readiness Levels (TRLs)⁴ to judge the progress and practical application of research (see Fig. 3).Universities took a significant role in research from TRL1 to TRL4. They are TRL1-basic principles observed, TRL2-technology concept formulated, TRL3-experiment proof of concept and TRL4-technology validated in lab. Usually, this process is through two types of funding which are University Basic Research Fund (e.g. University Grants Committee (UGC) - General Research Fund (GRF)) and Applied Research Fund (e.g. ITC Enterprise Support Scheme (ESS) (previously named Small Entrepreneur Research Assistance Programme (SERAP)).

In Figure 2, the solid line of the two valleys of death represents funding that increases in the beginning and ends at the breakeven point. The dotted line represents overall expense that is covered by funding at the first breakeven point. However, the second valley of death should be overcome through more investment apart from university research funding. Recently, CityU launched HK Tech 300 on 23 March 2021, a large-scale flagship innovation and entrepreneurship programme, for aspiring entrepreneurs among CityU students, alumni, research staff and others to launch startups and ignite their entrepreneurship journey.⁵

In order to achieve TRL5-technology validated in relevant environment to TRL7-system prototype demonstration in operational environment, a startup needs to produce a prototype and have capability for pilot production. Therefore, HKSTP will establish Professional Low-volume Manufacturing Workshop (ProShop) at Advanced Manufacturing Centre (AMC) supporting the re-industrialsation initiative of the HKSAR Government. ProShop is a key facility in AMC supporting product commercialisation from R&D to industrial production. It is suitable for startup production from 1 to 10,000 pieces per batch.

To overcome the commercialisation valley of death, funding support in HKSTP programmes for STEP, Incubation, Leading Enterprises Acceleration Programme (LEAP) and ELITE are HK$100K (seed funding), HK$860K to HK$1.29M (grant & financial aid), HK$4.8M (financial aid) and HK$5M to HK$20M (matching fund on R&D) with HK$1.5M rental subsidy, respectively. Angel Fund and HKSTP Corporate Venture Fund are significant during the incubation period. After commercialisation and maturation are ready, VC will also participate including series A, B, C… so as to scale up the business. Moreover, Global Acceleration Academy (GAA) is a free-of-charge open innovation platform that takes corporate innovation with deep-tech solutions from global tech ventures to the world. Through HKSTP and different partners support, an outstanding startup may become a unicorn and finally to go to IPO.

Figure 2: The whole Startup Cycle under CityU and HKSTP Ecosystem

Figure 3: Nine Technological Readiness Levels (TRLs)

Fostering enginpreneur from university

In order to engage engineering students in idea generation, product design cycle development and finally elaboration of a business model and plan, universities need to provide resources and training.  Thus, seeding entrepreneurship mindset into undergraduate engineering students is significant especially in a HKIE accredited engineering course. In 2020, a mandatory course named “SEEM 4066: Professional Engineering Practice” of  BEng in Systems Engineering and Management (BESEM) was revamped with oneof the lectures named “Entrepreneurship and Startup Ecosystem”. Its content includes Business Model Generation, Risk and Opportunity (SWOT), Leader Characteristics and Business Management, Hong Kong Startup Environment and Quality Startup Management System.⁶

Two identical polls were conducted before and after the entrepreneurship lecture in 2020 and 2021, respectively. The results are shown in Figure 4. It was found that 33% of the engineering students chose to be professional engineers after the lecture in 2021 compared to only 17% in 2020. Additionally, only 9% of the engineering students chose to become start-up founders after the lecture in 2021 compared to 18% in 2020. This increase in the career selection as professional engineer and decrease in startups may be attributed to  economic downturn and the COVID-19 pandemic in Hong Kong. Thus, professional engineer become better career choice than “management job” (15%), “partner of company” (13%) and “research and development (R&D)” (11%) in 2021. 

Based on our observation, undergraduate and graduate students are usually left with unfinished final year projects that do not turn into prototypes or business models for realising their ideas into society. Therefore, CityU sets up the HK Tech 300 Seed Fund under the HK Tech 300 Programme where each successful team will receive a seed fund (HK$100,000) to develop innovative ideas into a startup. For a 6 to 12-month funding period, it provides 8-week programme named “IGNITE” to educate, guide and inspire students and others interested in launching successful start-ups.⁵ The mission of IGNITE is showed as follows:

1. Identify your market and users
2. Grow a product story
3. Navigate tech to create a prototype
4. Inspire like-minded peers
5. Test your business model
6. Empower with funding

The eight-week programme modules are demonstrated in Figure 5.

Career Poll in 2020	Career Poll in 2021

Figure 4: Student career type selection before and after the lecture on entrepreneurship and startup in 2020 and 2021

Figure 5: IGNITE Training Programme (Eight Week Training Modules)

Conclusion

In this paper, we demonstrated how to encourage engineering students with innovative ideas to find a path for commercialisation through university programmes and accelerator fundraising that avoid the two valleys of death (Technological Valley of Death and Commercialization Valley of Death). Using CityU as example, undergraduate or postgraduate research that has achieved a certain level or have innovative idea for business will be supported by different funding under CityU Innopreneurship Ecosystem, especially HK TECH 300, assisting them to proof of concept and establishing a startup. After that they can join HKSTP startup programmes such as Pre-incubation (Science and Technology Entrepreneur Programme (STEP)), or incubation programmes (e.g. Incu-App, Incu-Tech and Incu-Bio, etc) depending upon their project maturity level. Finally, Leading Enterprises Acceleration Programme (LEAP) and ELITE could help them to scale-up and ultimate goal is to IPO.

Since the majority of engineering students’ career selection is professional engineer and as some of them will select startup, Enginpreneur is very good concept raised bythe HKIE to encourage professional engineers to be entrepreneurs using engineering knowledge for solving different society problems in innovative ways.

About the Author: Ir Dr Kim-Hung Lotto Lai is an Adjunct Professor of SEEM Dept. at the City University of Hong Kong. (Email: kimhlai@cityu.edu.hk)

References:

1. HKIE Enginpreneurs Hub (2020) - https://hkie.org.hk/zh-hant/discover/president_story/
2. Drucker, Peter F. (1985) “Management: Tasks, Responsibilities, Practices” Harper Perennial.
3. Dorri, Bijan (2013) "The Two Valleys of Deaths in Technology Commercialization", IEEE Life Sciences Grand Challenges Conference, Singapore
4. European Commission Decision C (2017) “Horizon 2020 work programme 2016–2017”. Online: https://ec.europa.eu/research/participants/data/ref/h2020/other/wp/2016-2017/annexes/h2020-wp1617-annex-ga_en.pdf
5. CityU HK Tech 300 - https://www.cityu.edu.hk/hktech300/
6. Lai, Lotto K.H. (2020) “Case study: revamp of an engineering course and students’ feedback on online teaching during COVID-19”, The Journal of The Hong Kong Institution of Engineers, Vol. 48, Oct 2020, pp.20-23. (http://www.hkengineer.org.hk/issue/vol48-october2020/feature_story/?id=13152)