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OECD Studies on SMEs and Entrepreneurship Incubation in Entrepreneurial Ecosystems Hatching GrowthOECD Studies on SMEs and Entrepreneurship Incubation in Entrepreneurial Ecosystems HATCHING GROWTHThis work is issued under the responsibility of the Secretary-General of the OECD, and does not necessarily reflect the official views of OECD Member countries. This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

Please cite this publication as: OECD (2026), Incubation in Entrepreneurial Ecosystems: Hatching Growth, OECD Studies on SMEs and Entrepreneurship,

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delivered through a multi-channel mix of regional and national public policies rather than one centralised funding system. This approach has facilitated the provision of tailored support across sectors and regions and enabled multiple delivery methods to be explored. Indeed, experimentation through pilot programmes and research has opened the way for gradual improvement of incubators’ practices, reducing displacement effects and increasing the long-run impact of the programmes. Public funding has also been instrumental in catalysing private resources. There are also valuable lessons in the UK’s approach to data sharing and performance measurement. Data sharing is compulsory for incubators receiving public funding. This has contributed not only to improved performance and the sharing of good practices. Another distinctive feature of the UK’s policy approach is the commitment to supporting entrepreneurs from all different groups, which is often References

Beauhurst (2018), Accelerating the UK. [3] Bone, J. et al. (2019), The impact of business accelerators and incubators in the UK. [4] Centre for Entrepreneurs (2022), Incubation Nation: The acceleration of UK startup support. [1] Hewitt-Dundas, N. and C. Burns (2016), “Structural Capital of University Spin-Out Firms: The Moderating Role of University Incubators”, in International Studies in Entrepreneurship, https://doi.org/10.1007/978-3-319-17713-7_4. [2] Ipsos MORI (2020), Evaluation of ICURe. [5]OECD Studies on SMEs and Entrepreneurship Incubation in Entrepreneurial Ecosystems Hatching Growth Business incubators are vital players within entrepreneurial ecosystems. They specialise in identifying the most promising start‑up and scale‑up companies and aiding their development through holistic support packages and making connections to the wider ecosystem. Substantial public and private investments have driven major growth in the incubator population in recent decades, accompanied by other trends including increased specialisation, more virtual delivery models, and more internationalisation support. Government support has been key to this growth in incubation and policy retains an important role. However,

(https://creativecommons.org/licenses/by/4.0/). Attribution – you must cite the work. Translations – you must cite the original work, identify changes to the original and add the following text: In the event of any discrepancy between the original work and the translation, only the text of the original work should be considered valid. Adaptations – you must cite the original work and add the following text: This is an adaptation of an original work by the OECD. The opinions expressed and arguments employed in this adaptation should not be reported as representing the official views of the OECD or of its Member countries. Third-party material – the licence does not apply to third-party material in the work. If using such material, you are responsible for obtaining permission from the third party and for any claims of infringement. You must not use the OECD logo, visual identity or cover image without express permission or suggest the OECD endorses your use of the work. Any dispute arising under this licence shall be settled by arbitration in accordance with the Permanent Court of Arbitration (PCA) Arbitration Rules 2012. The seat of arbitration shall be Paris (France). The number of arbitrators shall be one. 3 Foreword 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,

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

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.

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INCUBATION IN ENTREPRENEURIAL ECOSYSTEMS © OECD 2026

Acknowledgements

This report has been prepared by the Centre for Entrepreneurship, SMEs, Regions and Cities (CFE) of the Organisation for Economic Co-operation and Development (OECD) under the direction of Lamia Kamal-Chaoui. It forms part of the programme of work on ‘fostering startups and scaleups’ of the OECD Committee on SMEs and Entrepreneurship (CSMEE), supported by the CFE SME and Entrepreneurship Division (SMEE) led by Lucia Cusmano, Head of Division. The report drafting and analysis were directed by Dr. Jonathan Potter, Head of the Entrepreneurship Policy and Analysis Unit, CFE. The report was drafted by an OECD Secretariat team involving Pablo Shah, Roberto Crotti, Angeliki Spiliopoulou, Jian Bang, Marta Lasheras Sancho, Minsuk Kim and Jonathan Potter. Expert written contributions were made by Martin Bliemel, University of Technology Sydney, Australia; Alasdair Reid, European Future Innovation Centre, Belgium; Professor Wadid Lamine, University of Ottawa, Canada; Professor Nadine Levratto, University of Paris Nanterre, France; Professor Philippe Mustar, Mines Paris – PSL, France; Professor Klaus Fichter, Borderstep Institute, Germany; Professor Peter Lindelöf, University of Southeastern Norway, Norway, Professor Manuel Laranja, University of Lisbon, Portugal; Professor

Professor Nadine Levratto, University of Paris Nanterre, France; Professor Philippe Mustar, Mines Paris – PSL, France; Professor Klaus Fichter, Borderstep Institute, Germany; Professor Peter Lindelöf, University of Southeastern Norway, Norway, Professor Manuel Laranja, University of Lisbon, Portugal; Professor Björn Asheim, Lund University, Sweden; Professor Magnus Klofsten, Linköping University, Sweden; Professor Bart Clarysse, ETH Zurich, Switzerland; Professor Helen Lawton Smith, Birkbeck, University of London, United Kingdom; Professor Kevin Mole, University of Warwick, United Kingdom; and Professor Sarfraz Mian, State University of New York at Oswego, United States. Chapter 5 of the report is based on a paper prepared for the OECD Secretariat by Professor Magnus Klofsten, Linköping University, on coaching in business incubators. Chapter 8 is based on a paper prepared by Professor Manuel Laranja, University of Lisbon, on entrepreneurship training in business incubators. The report draws on material developed in three in-depth OECD studies on incubation policies conducted at the request of the Department of Enterprise, Trade and Employment of Ireland, the Ministry of SMEs and Startups of the Republic of Korea, and the Portuguese Ministry of Economy and Maritime Affairs, the latter with the financial support of the European Commission’s SG Reform through Technical Support Instrument project 23PT34. The report has benefitted from interviews and information provided by many stakeholder organisations in case study countries, including representatives of startup and scaleup enterprises, incubator and accelerator managers and staff, universities, entrepreneur and employer associations, and government ministries and agencies. 5

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Table of contents Foreword 3 Acknowledgements 4 Executive summary 9 1 Takeaways for governments 11 Encourage incubators to act as entrepreneurial ecosystem hubs and connectors 12 Promote individualised services, including coaching and mentoring 12 Increase the number of specialised incubators 13

Foreword 3 Acknowledgements 4 Executive summary 9 1 Takeaways for governments 11 Encourage incubators to act as entrepreneurial ecosystem hubs and connectors 12 Promote individualised services, including coaching and mentoring 12 Increase the number of specialised incubators 13 Encourage internationalisation 13 Use funding systems and capacity building support to upgrade quality 13 Part I What is business incubation and why it matters for policy 15 2 What is business incubation? 16 Defining business incubation 17 Incubation activities 18 References 21 3 Why does policy support incubation? 22 How incubators facilitate startup and scaleup development – transmission channels 23 Evaluation evidence on incubator impacts 23 Market failures affecting the supply of incubation 25 References 26 Note 29 4 Trends in business incubation 30 References 32 Note 33 Part II What are the main services provided? 34 5 Coaching 35 What is coaching? 36 How is coaching conducted? 36 What tools are used in coaching? 37 Can any effects of coaching be observed? 376 

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Coaching within business incubators 38 Conclusions and policy lessons 42 References 43 6 Internationalisation assistance 44 The emergence of “born global firms” 45 The role of incubators in supporting startup globalisation 46 Dedicated incubation programmes for startup globalisation 47 Selecting and supporting companies with internationalisation potential 51 Leveraging public facilities overseas to enrich internationalisation supports for startups 52 Conclusions and policy lessons 53 References 54 Notes 56 7 Financing 57 The startup and scaleup finance gap 58 How incubators bridge financing gaps 58

51 Leveraging public facilities overseas to enrich internationalisation supports for startups 52 Conclusions and policy lessons 53 References 54 Notes 56 7 Financing 57 The startup and scaleup finance gap 58 How incubators bridge financing gaps 58 Conclusions and policy lessons 62 References 63 Notes 65 8 Entrepreneurship skills training 66 What skills are needed for startup and scaleup development? 67 Entrepreneurship skills training in business incubators 68 Conclusions and policy lessons 71 References 72 9 Specialised incubation 75 Introduction 76 Benefits and drawbacks of specialised incubation on incubator clients 77 Drivers of specialisation for incubators 78 Main features of specialised incubators, by type 78 Conclusions and policy lessons 87 References 88 Notes 94 Part III How do governments support business incubators? 95 10 Mapping of incubation support policies in OECD countries 96 Introduction 97 Results 97 Conclusions 101 11 Key policy choices in supporting business incubation 103 Which incubation activities to fund? 104 Selecting delivery organisations 106 Method of funding 110 Strengthening linkages between incubators 119 Embedding incubators within entrepreneurial ecosystems 123 7

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Co-ordinating with wider support policies for innovation and entrepreneurship 127 Conclusions and policy lessons 132 References 133 Notes 136 Part IV International country cases 137 12 Estonia 138 Overview of incubation system 139 Major policies for incubation 139 Conclusions and lessons for other countries 140 Notes 141 13 France 142 Overview of incubation system 143 Major policies for incubation 144

137 12 Estonia 138 Overview of incubation system 139 Major policies for incubation 139 Conclusions and lessons for other countries 140 Notes 141 13 France 142 Overview of incubation system 143 Major policies for incubation 144 Conclusions and lessons for other countries 145 References 145 Note 145 14 Ireland 146 Overview of incubation system 147 Major policies for incubation 147 Conclusions and lessons for other countries 148 References 149 15 Korea 150 Overview of incubation system 151 Major policies for incubation 151 Conclusions and lessons for other countries 153 References 153 16 Portugal 154 Overview of incubation system 155 Major policies for incubation 155 Conclusions and lessons for other countries 156 Note 157 17 Singapore 158 Overall incubation system 159 Major policies for incubation 159 Conclusions and lessons for other countries 160 References 161 18 Sweden 162 Overview of incubation system 163 Major policies for incubation 163 Conclusions and lessons for other countries 1658 

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19 United Kingdom 166 Overview of incubation system 167 Major policies for incubation 167 Conclusions and lessons for other countries 169 References 169

FIGURES Figure 4.1. The rapid evolution of incubation supply 31 Figure 10.1. Incubation policies in OECD countries that form part of a broader strategic action plan 97 Figure 10.2. Type of entities operating the incubators supported by the policy 98 Figure 10.3. Nature of support provided by the policy to the incubators 99 Figure 10.4. Conditions for receipt of funding

97 Figure 10.2. Type of entities operating the incubators supported by the policy 98 Figure 10.3. Nature of support provided by the policy to the incubators 99 Figure 10.4. Conditions for receipt of funding 100 Figure 10.5. Criteria for selecting incubators for support 100 Figure 10.6. Services incubators are required to offer their clients in order to qualify for support through the programme 101 Figure 11.1. Grants issued through the New and Existing Incubators (NEI) stream and Experts in Residence (EIR) stream of Australia’s Incubator Support programme 113

TABLES Table 2.1. Taxonomy of business incubation entities 17 Table 5.1. Key required elements in the incubator coaching approach within Sweden’s NIP 38 Table 6.1. Obstacles faced, by company profile 45 Table 7.1. Equity investment models for incubators 59 Table 7.2. Incubators’ strategies for building clients’ investment readiness 61 Table 9.1. Main types of incubator specialisation 76

BOXES Box 6.1. K-Startup Centers, Korea 48 Box 6.2. The German Accelerator programme 49 Box 8.1. The ETH Zürich Pioneer Fellowship Deep-Tech Incubation programme 69 Box 9.1. The United Kingdom’s Catapult programme 79 Box 9.2. The WomenEntrepreneurs4Good Accelerator Programme 83 Box 11.1. The National Incubator Programme, Sweden 111 Box 11.2. Performance monitoring systems for incubators and accelerators – selected international cases 116 Box 11.3. The Canada Accelerator and Incubator Programme 117 Box 11.4. The National Network of Incubators, Portugal 120 Box 11.5. The incubator programme of the Industrial Development Corporation of Norway 121

116 Box 11.3. The Canada Accelerator and Incubator Programme 117 Box 11.4. The National Network of Incubators, Portugal 120 Box 11.5. The incubator programme of the Industrial Development Corporation of Norway 121 Box 11.6. The French Tech programme 125 Box 11.7. The Incubator Support Programme of Australia’s National Innovation and Science Agenda 128 Box 11.8. The Business Incubator Association of New York State 130 9

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Executive summary Incubators, including accelerators, are business support entities specialised in unlocking the potential of young or developing companies, often with a strong innovative component. Many of the best and most successful startups and scaleups pass through business incubators. When they do, they benefit from a range of supports, often including a physical space to work, coaching and mentoring, technical assistance, networking and peer learning, access to testing facilities, and, in some cases, direct funding in the form of grants, loans or equity investment. Incubators are increasingly also emerging as entrepreneurial ecosystem hubs, plugging their ventures into the surrounding ecosystem and connecting them with investors, coaches, universities, clients and suppliers, and public support programmes. The number of incubators has grown rapidly internationally in the last two decades, although they vary substantially in terms of their support offer, business models, target companies, and delivery approaches. The growth in incubation is accompanied by other trends including increased specialisation of incubators, greater use of virtual delivery models, greater offerings of internationalisation support, the creation of shorter acceleration programmes, and more emphasis on the formation of partnerships with other ecosystem actors. The extent to which incubators are ahead or behind in these trends depends on the specific incubators and the country-level incubator systems they are part of. Significant sums of public money are allocated to incubators for boosting startups and scaleups – a task

ecosystem actors. The extent to which incubators are ahead or behind in these trends depends on the specific incubators and the country-level incubator systems they are part of. Significant sums of public money are allocated to incubators for boosting startups and scaleups – a task vital for enhancing competitiveness, innovation, productivity and employment. To maximise the effectiveness of these supports, policymakers need to consider several challenging policy questions, including: • Which incubation activities should be promoted more strongly? • How much funding to provide, to which organisations, and under what conditions? • How to monitor performance? • How to incentivise or enable good practices in support delivery? • Should policy support focus on particular types of companies, sectors or regions? This publication is intended as a guide for policymakers to navigate these types of policy decisions. Part 1 proposes a working definition for business incubation and sets out what incubation programmes typically involve, the rationale for public involvement, and the major trends that are reshaping incubation. Part 2 examines the main types of services provided by incubators, with dedicated chapters on coaching, internationalisation assistance, financing, entrepreneurship training, and specialised incubation. Part 3 turns to government policy, presenting the results of a comprehensive mapping of policies for incubation in OECD countries and a discussion of policy issues. Part 4 presents eight country incubation policy case studies – Estonia, France, Ireland, Korea, Portugal, Singapore, Sweden, and the United Kingdom – offering information on their incubation systems, major incubation policies and lessons for other countries.10 

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This leads to three key messages for governments:

1. Policy should support incubator evolution towards entrepreneurial ecosystem hubs. In the past, the key role of incubators was often to provide space and services direct to startups. However, many leading incubators today are taking additional roles as hubs in entrepreneurial ecosystems.

They not only provide support to the promising startups they onboard but also connect them to a

past, the key role of incubators was often to provide space and services direct to startups. However, many leading incubators today are taking additional roles as hubs in entrepreneurial ecosystems. They not only provide support to the promising startups they onboard but also connect them to a wide array of actors, contacts and resources in the ecosystem as well as providing ecosystem visibility and leadership. The networks and connections of incubators are now a core part of their value proposition for startups and scaleups and they also help other entrepreneurial ecosystem actors to access these firms. Policy can reinforce this new reality by channelling support to incubators that are deeply embedded in their entrepreneurial ecosystems, creating networks for incubators, encouraging strategic partnership formation, and providing quality assurance to help incubators build credibility in their ecosystems.

2. Incubation is more effective when personalised. The defining task for incubators is to provide support that meaningfully addresses their clients’ evolving needs. Entrepreneurs face intense time pressures. Policy supports that do not match their needs deter engagement and can be counterproductive. Personalisation is key. One-to-one coaching, specialised programmes, smaller and more targeted trainings, and bespoke matchmaking are some of the ways incubators are ensuring their startups and scaleups receive an individualised experience that delivers real value.

Coaching is an essential aspect of incubation that is often delivered either in too small volumes or at too low a standard. Where this is the case, policy can incentivise and support incubators in upgrading their coaching offer. There is also scope to help the emergence of more specialised incubators, for example by sector or target population, where there are distinct support needs and sufficient take up.

3. Policy can be an important lever for raising incubation standards and keeping pace with trends and best practices. Across the world, leading incubators are constantly adapting, introducing new services and embracing new delivery approaches that provide a blueprint for others to emulate. Policy plays a vital role here. As a trusted player and important funding source, the public sector can help incubators to expand their capacity and improve their approaches to align with emerging best practices. Public funding support has been instrumental in building the

introducing new services and embracing new delivery approaches that provide a blueprint for others to emulate. Policy plays a vital role here. As a trusted player and important funding source, the public sector can help incubators to expand their capacity and improve their approaches to align with emerging best practices. Public funding support has been instrumental in building the base of incubators in recent years, but going forwards, the policy focus needs to pivot towards lifting incubation standards. The most direct policy lever is in setting the selection criteria and funding conditions for incubator support programmes, which should earmark funding for specific activities where there are support gaps, set and potentially adjust funding amounts depending on incubator performance, and design selection processes that channel funding to incubators with the greatest potential to deliver impact. Most countries can also do more to boost incubation standards through non-financial assistance. Creating incubator networks is a powerful way of fostering peer learning, resource sharing and collaboration within the system, while training schemes and guidelines for incubator personnel can also be impactful. 11

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This chapter is a synthesis of the main findings and policy lessons for governments from the report in the design and implementation of public supports for incubation.

1 Takeaways for governments12 

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Encourage incubators to act as entrepreneurial ecosystem hubs and connectors In addition to the traditional role of incubators in offering working space and business advisory services to startups and scaleups, they are beginning to emerge as hubs and connectors in their entrepreneurial ecosystems, connecting their clients with investors, mentors, public supports, customers, suppliers, researchers, and other partners and offering gateways for other ecosystem actors to access promising firms. Government policy should encourage incubators in this critical ecosystem connector role. The success of incubators as hubs and connectors is often underpinned by well-connected and energised

researchers, and other partners and offering gateways for other ecosystem actors to access promising firms. Government policy should encourage incubators in this critical ecosystem connector role. The success of incubators as hubs and connectors is often underpinned by well-connected and energised personnel who are pro-active in building links between their clients and other entrepreneurial ecosystem actors. An example is the proliferation of “demo days”, which are often the climax of acceleration programmes, where startups make pitches to attending investors or customers. It is also common for representatives from public agencies to have desks or office hours within incubators where they can showcase relevant public programmes and respond to queries from entrepreneurs. Another example is the nurturing of ecosystem connections when incubators bring delegations of their entrepreneurs and startups to high-profile and well-attended networking events within the local or national ecosystem. To support this development, governments can: • Prioritise funding to incubators with high embeddedness in the entrepreneurial ecosystem and strong internal competencies for networking and ecosystem building. • Give preference to funding applications submitted by consortia to jointly deliver incubation programmes. • Apply matching funding requirements for public grants for incubators to ensure supported incubators have links with others in the ecosystem. • Provide quality assurance