BAI, Sweden: Business creation and entrepreneurship
The Business Arena Imaging (BAI) project combines the development of non-core business ideas in large corporations with providing assistance to highly qualified unemployed persons in finding a job. The project has developed methods aimed at identifying unexploited business ideas and at recruiting suitable persons, while bringing business ideas to a test market stage.
Business Arena Imaging (BAI) is part of the Vinnvinn programme. The latter programme emerged due to the large-scale unemployment that occurred among specialist technicians and engineers, following the economic crises at Ericsson in 2001–2002. These crises resulted in the redundancy of tens of thousands of people, including highly qualified workers with specialist knowledge and extensive experience. This problem was discussed by the Swedish Association of Graduate Engineers (Civilingenjörsförbundet, CF), of which many former Ericsson employees were members, and by the National Agency for Outplacement (Trygghetsrådet, TRR), a union agency involved in assisting redundant persons to find new jobs. Up until this point, most of the programmes aimed at helping unemployed people were designed for those with a low or standard level of qualifications.
At the same time, a general concern was emerging in Sweden that the proportion of start-up companies in the country was too low. Sweden’s economy has traditionally been dominated by big corporations and a large public sector. Small and medium-sized enterprises (SMEs) have played a less significant role in the economy, and the rate of new start-up companies is comparatively low in Sweden.
Description of the initiative
The BAI initiative was established in the region of Skåne, in southern Sweden, as a project of the company Teknopol AB in the southern city of Lund. Teknopol is a business development company, which provides services for start-up companies in a group of university-affiliated business incubators in the Skåne region and in neighbouring regions within southern Sweden.
BAI is funded by the Swedish Governmental Agency for Innovation Systems (Vinnova), the regional parliament of Skåne and the City of Lund. Partners involved in the project include the regional labour market board (LAN), the TRR and the university-affiliated business incubators Ideon at Lund University and Minc at Malmö University.
BAI has two full-time employees, who have experience as entrepreneurs and a training background in computer science and business administration. These employees visit major corporations in the Skåne area to determine if there are any unexploited products or business ideas that companies would be willing to allow BAI to develop. If an agreement is reached, a letter of intent is signed by BAI and the company providing the product or business idea, outlining the company’s rights should the business idea prove to be successful. This may take the form of a royalty payment, joint ownership, or some other arrangement, depending on the nature of the idea and the interest of the initiating company.
Once the business idea has been identified, the BAI project officers refer to the LAN and the TRR, requesting the names of registered unemployed persons who may have qualifications and interests in developing a business. These persons are interviewed and assessed for the project. Once the required number of persons is recruited, they can start working on the business idea following a four-step procedure designed by BAI: screening, analysis and pre-study; development work regarding the product and market; market testing; and evaluation. The work is supported by BAI staff and BAI covers the costs.
One of the recruited persons is assigned as project leader. All persons recruited are compensated for their time through the unemployment benefit system, receiving up to 80% of what they earned in their last job. In accordance with this scheme, each project is given six months for the development process, in line with the timeframe set by the rules of the LAN.
The BAI project was initiated in April 2005, securing funding for one year of operations. The intention was that the project should develop 10 business ideas during its first year. However, due to delays, only seven projects were initiated. Of these, four plans have been completed; in one case, the project was dropped. Two companies have since been established as a result of the initiative, while one is in the process of starting up.
Among the companies involved in the initiative is Ground Truth Vision, which is developing new services based on its knowledge in electronic face recognition. The company Pre-sent is attempting to use mobile phone technology to devise new business concepts for a photo printing company. Metronome Production is looking for new ways of distributing TV and video films. Another company is involved in helping the National Weather Board to find new digital ways of selling and distributing weather forecasts.
A major difficulty faced by the project concerns the rules for persons registered with the Swedish Labour Market Board (Arbetsmarknadsstyrelsen, AMS). The six-month period allowed for ‘activity compensation’ is often too short for the development of a new product. Another issue relates to the fact that every person on ‘activity compensation’ is expected to be available for vacant jobs whenever they arise. This means that a person who has been recruited for a Vinnvinn project may have to leave more or less immediately if offered a job elsewhere. These two factors have led to a slowdown in the project’s development.
Most programmes aimed at assisting long-term unemployed people are designed for those with low levels of education and skills. However, a growing number of persons in Sweden with high qualification levels are experiencing problems in finding a job. The Vinnvinn project is exploring a number of ways to find jobs for persons with this kind of background. Its efforts include attempts to locate qualified jobs in SMEs, as well as measures aimed at encouraging new start-up companies.
The BAI initiative is an example of an entrepreneur-oriented programme which attempts to exploit business ideas in large corporations and to develop them with the help of qualified unemployed persons. As the programme has only been in operation for about a year, it is still too early to evaluate its long-term business impact. Nonetheless, the results of the first year confirm that the BAI project is realistic in its aims and that it constitutes an innovative alternative for some long-term unemployed persons.
The BAI project has also shown that it is possible to get large corporations to offer business ideas and products to an outside operator such as BAI. However, it still takes some time and effort to convince a company about the skills of the developing organisations. The BAI initiative also demonstrates that it is possible to find qualified and interested persons among the unemployed population.
Most programmes directed at assisting long-term unemployed people use the unemployed person as their point of departure. Conversely, the BAI project starts with the business idea first. Experience so far indicates that unemployed persons are flexible enough for this strategy to be feasible.
Exemplary and contextual factors
The BAI project focuses on identifying unexploited business ideas in large corporations and on developing these ideas with the assistance of qualified unemployed persons. It is a well documented fact that large corporations are not good at developing business ideas that fall outside the company’s main area of activity. These ideas tend to be neglected and remain unexploited. This project aims to identify such business ideas and to develop them further using the expertise of qualified persons who have become unemployed.
Olle Hammarström, National Institute for Working Life, Stockholm