Startups and scaleups are key to economic growth and competitiveness. They turn ideas, knowledge and research into new products, services and processes, increasing productivity, employment, competition and choice and generating positive spillovers for the economy. Policymakers seek to release these benefits by addressing market and institutional failures affecting startups and scaleups in domains including innovation, skills, financing, and networks. Incubation policy is one of the most direct ways through which governments support startups and scaleups. Incubators scout for high-potential entrepreneurs and startups, select and prepare ventures for incubation, offer them direct services such as advice, lab space, and equity investment, and connect them to other actors in the entrepreneurial ecosystem like universities, legal experts, mentors, and clients.
Incubator practices are evolving rapidly and governments need to be abreast of these changes and encourage the diffusion of best practices. Short-term acceleration for cohorts of scaleups is increasing, incubators are offering more online services and serving wider catchment areas, soft landing and internationalisation supports are on the rise and specialised incubators are emerging aimed at sectors like health tech and AI.
This report reviews incubation trends and policies and recommends future directions for incubation policies. The first part proposes a definition for business incubation and sets out the main activities this entails, the rationale for policy support, and the latest trends in incubation models. The second part explores the main services that incubators provide to startups and scaleups, including coaching, support in bridging financing gaps, assistance in penetrating international markets, training to develop entrepreneurship skills, and specialised supports tailored to the needs of specific types of companies. Part 3 examines the role of government policy in supporting incubation systems. It presents an OECD-wide policy mapping of incubator support policies and discusses key policy choices for governments in developing incubation policy, such as which activities to fund, which entities to select to deliver programmes, and how to build the capacity of incubators and embed them within entrepreneurial ecosystems. It offers policy recommendations and inspiring international policy practices. The final part of the report offers country case studies of incubation policy systems in Estonia, France, Ireland, Korea, Portugal, Singapore, Sweden and the United Kingdom, identifying potential lessons for other countries.
Examples of good practice policy cases and incubation initiatives can be found throughout the report, including Sweden’s National Incubator Programme, Canada’s performance measurement framework for incubators, the ETH Zürich Pioneer Fellowship Deep-Tech Incubation Programme, the French Tech initiative, Station F in France, Korea’s K-Startup Centres, and the United Kingdom’s Catapult programme.
The overall aim is to take stock of the major trends that have reshaped incubation in recent years and offer analysis, inspiration and recommendations for effective government policies that can strengthen incubation systems for greater startup and scaleup success.