Incubation in EntrepreneurialEcosystems Hatching Growth Incubationin EntrepreneurialEcosystems HATCHING GROWTH This work is issued under the responsibility of the Secretary-General of the OECD, and does not necessarily reflect theofficial 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 overany 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 ofsuch data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements inthe West Bank under the terms of international law. OECD (2026),Incubation in Entrepreneurial Ecosystems: Hatching Growth, OECD Studies on SMEs and Entrepreneurship,OECD Publishing, Paris,https://doi.org/10.1787/21be9d03-en. ISBN 978-92-64-70417-6 (print)ISBN 978-92-64-86340-8 (PDF)ISBN 978-92-64-97420-3 (HTML) OECD Studies on SMEs and EntrepreneurshipISSN 2078-0982 (print)ISSN 2078-0990 (online) Photo credits:Cover design by OECD using images from © Connect Images/Getty Images Plus. Attribution 4.0 International (CC BY 4.0) This work is made available under the Creative Commons Attribution 4.0 International licence. By using this work, you accept to be bound by the terms of this licence(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 thetranslation, 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 inthis 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 forany 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 shallbe Paris (France). The number of arbitrators shall be one. Foreword Startups and scaleups are key to economic growth and competitiveness. They turn ideas, knowledge andresearch into new products, services and processes, increasing productivity, employment, competition andchoice and generating positive spillovers for the economy. Policymakers seek to release these benefits byaddressingmarket and institutional failures affecting startups and scaleups in domains includinginnovation, skills, financing, and networks. Incubation policy is one of themost direct ways throughwhich governments support startups and scaleups. Incubators scout for high-potential entrepreneursand startups, select and prepare ventures for incubation, offer them direct services such as advice,labspace,and equity investment,and connect them to other actors in the entrepreneurialecosystem like universities, legal experts, mentors, and clients. Incubator practices are evolving rapidly and governments need to be abreast of these changes andencourage 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 andinternationalisation supports are on the rise and specialised incubators are emerging aimed at sectors likehealth tech and AI. This report reviews incubation trends and policies and recommends future directions for incubationpolicies. The first part proposes a definition for business incubation and sets out the main activities thisentails, the rationale for policy support, and the latest trends in incubation models. The second partexplores the main services that incubators provide to startups and scaleups, including coaching, supportinbridging financing gaps,assistance in penetrating international markets,training to developentrepreneurship skills, and specialised supports tailored to the needs of specific types of companies.Part 3examines the role of government policy in supporting incubation systems.It presents anOECD-widepolicy mapping of incubator support policies and discusses key policy choices forgovernments in developing incubation policy, such as which activities to fund, which entities to select todeliver programmes, and how to build the capacity of incubators and embed them within entrepreneurialecosystems. It offers policy recom