At their best, incubators and accelerators can be the beating heart of the local business community. By combining physical working spaces and facilities with financing, training, coaching and mentoring, they can mean the difference between businesses thriving and struggling to get off the ground.
The evidence base on incubator impacts is encouraging. For example, a 2024 analysis by Innovation, Science and Economic Development Canada finds that incubated startups had 14% higher employment and 13% higher revenues than comparable firms outside of the incubation system.
There is also evidence that incubation accelerates company exits, as exposure to experts and rapid stress-testing of ideas cause entrepreneurs to abandon less promising ventures.
Incubation must evolve
Spurred on by these promising findings, incubators have grown rapidly in number in recent decades, driven by strong public support and demand from startups and scaleups – the number of incubators listed in the Crunchbase dataset quadrupled between 2008 and 2021.
This growth has been accompanied by major changes in how incubation is delivered. Today, many are much more specialised than in the past. They make greater use of virtual delivery models, place more emphasis supporting “born global startups”, and increasingly work through broader partnerships. These trends are visible in leading incubators across the OECD, from Station F in France to the MaRS Discovery District in Canada.
The landscape is set to keep changing, as new types of start-ups and scale-ups are emerging with distinct support needs, including deep tech ventures based on scientific discoveries and research.
Yet not all incubators are an unqualified success. Outcomes are strongly influenced by programme design choices. For example, a study of the Startup Chile Accelerator only finds positive outcomes for entrepreneurs that receive training on top of space and funding. Incubators can also benefit the wider ecosystem, for example by attracting venture capital investors to the area.
Personalisation is key, with one-to-one coaching, specialisation programmes, and bespoke matchmaking being some of the ways to deliver real value.
Another core building block for effective incubation is ensuring strong linkages with the rest of the entrepreneurial ecosystem – including investors, mentors, corporates and universities – and facilitating startups’ access to these actors and resources.
The role of public policy
While incubation services are often delivered by private entities, public policy plays an important role in steering the system and filling support gaps.
In 2025, 31 out of 38 OECD countries had an active incubation policy at the national level. Funding is by far the most popular type of incubation policy, with 34 out of 70 mapped policies including the provision of financial support to incubators. Less common is the provision of capacity building for incubator staff (11 policies mapped) or the creation of incubator networks (11 policies mapped).
While public support has fuelled growth in the number of incubators internationally, policy can do more to raise quality.
As important funders of business incubators, governments can lift standards and incentivise best practices through performance monitoring, funding conditions, selection criteria, and capacity building and networking supports for incubator personnel.
They can also steer incubation systems towards addressing gaps in areas like coaching or internationalisation or in specific sectors.
In addition, policy can encourage the role of incubators as entrepreneurial ecosystem hubs by allocating public funding towards organisations with stronger ecosystem connections and by funding joint incubation programmes involving multiple actors.
Sweden’s longstanding National Incubator Program (NIP) stands out as a model for other countries. Supported incubators benefit from a relatively long period of financial support, with funding amounts adjusted based on the sophistication and capabilities of the incubators and conditional on the adoption of best practices in activities like coaching and mentoring. The NIP also emphasises collaborations and partnerships, including through peer learning and shared training activities and funding of joint programmes.
From expansion to impact
Public funding has been key to the growth of business incubation across the world in recent years and remains vital.
Going forward the policy priorities are to fill gaps in the provision of more sophisticated and specialised services, level up the quality of services across the incubator system and make more use of the potential of incubators as entrepreneurial ecosystem hubs.
This means targeting funding more carefully; refining programmes to address gaps and promote best practices; and investing in capacity building for incubator personnel.
The new OECD Publication Incubation in Entrepreneurial Ecosystems: Hatching Growth serves as a guide to support policymakers in navigating policy choices surrounding incubation policy design and implementation, taking stock of key incubation trends and setting out policy recommendations and inspiring examples of incubation best practices and policies internationally.
Pablo Shah is a Junior Policy Analyst at the OECD’s Centre for Entrepreneurship, SMEs, Regions and Cities, with a focus on entrepreneurship policies. He is a co-author of the OECD’s report on the promotion of start-ups and scale-ups in Denmark. In previous roles, Pablo has worked as an economist at consultancies and think tanks, and formerly worked as a civil engineer in the water industry. He holds a Master’s degree in Economics from the University of Cambridge and a Master of Engineering degree in Civil Engineering from the University of Bristol.