Home Business & Management What is Business Incubation – How it is important to grow business

What is Business Incubation – How it is important to grow business




  1. Business Incubation
  2. Evolution of business incubation
  3. Corporate Incubation Models
  4. Technology Business Incubator (TBI)
  5. Start-up Village
  6. GSF
  8. Indian Angel Network
  9. Center for Innovation
  10. India’s start-up Ecosystem
  11. Conclusion
  12. FAQs

Business incubation

Business incubation is facility centers where start-ups are kept to survive, to adjust to their surroundings, and become viable business propositions in the long run.

However, Medical science tells, An incubator is a controlled and protective environment where a newborn is kept under intense care.

Also, The analogy is similar to a business incubator.

Entrepreneurs play an important role in the economic development of a country Growth of businesses and entrepreneurship, fosters

Economic development and allows new ideas and products to come to the fore, bring about market efficiency, facilitates the creation of wealth and jobs in the economy

We are in a phase where Entrepreneurship is in a growth stage,

Therefore, The eco-system supporting this growth must also take shape.

The very first objective of a business incubator, therefore,

It is to render such programs to start-ups/ ventures that will allow the eventual freestanding of businesses and bring about financial viability.

Incubation involves the provision of facilities typically including physical infrastructure, provision of mentorship support, access to networks, access to market, etc. to the Start-ups.

Of all these features, physical infrastructure entails large capital investments,

This is one of the reasons why we see that a lot of incubators in several countries are government initiatives.

However, the required skills for operating an incubator are pivotal as well as this expertise of the private sector needs to be leveraged.

Some of the common incubation services include:-

  1. Training on business basics
  2. Networking activities
  3. Marketing assistance
  4. Internet access
  5. Accounting and financial management, legal and regulatory support

1) Access to funding, angel investors, strategic partners Training on presentation skills.

Intellectual property management Advisory board assistance and identifying mentors

The fact that incubators aid in the survival and development of start-ups is now a matter of empirical evidence.

Multiple studies indicate that:-

Incubated companies have higher survival rates and lead to success more than un-incubated companies.

According to the US-based National Business Incubator Association, un-incubated micro and small-sized enterprises report about 10 of survival rate, and 80%-90% of them survive for about one year,

While the peers that graduated from incubator last for more than five years.

NYU Stern School of Business economic impact study found that in an of five years, three incubators linked to the Polytechnic Institute of New 10 University, generated $251 million in economic activity and created 900 Feated 900 jobs (in 2013).

Want to various aspects of the development of an economy

Evolution of business incubation

– A global perspective

The concept of business incubation particularly began in the U.S. in 1959,

And later spread out to the UK and the rest of Europe at the beginning of the 1980s.

Similarly, The concept reached China with the establishment of the first business incubator there-Wuhan Business Incubator in 1987.

By the mid-1990s there were around 1500 incubators in the world! The U.S. based National Business Incubation Association (NBIA) estimates there are 7000 incubators worldwide

Several factors contributed to the emergence of the concept of business incubation in the USA including the energy crisis of the 1970s leading to a deceleration in economic growth.

The U.S. policymakers identified the role of innovation.

Entrepreneurship and creation of new MSMEs in order to sustain local economies.

In order to promote innovation and entrepreneurship.

The successful entrepreneurs and venture capitalist groups sought to transfer their own new venture experiences to start-ups through an environment instrumental in successful technological.

Innovation and commercialization, For-profit Incubators.

Therefore, profit incubators car revenue through the infrastructural facilities and support services they render to the ventures they incubate.

Apart from these, Therefore profit incubators also take up an equity stake in the start-ups with hope for growth in the start-up’s valuation.

Corporate business Incubation Models

Such as the structure and strategy vision of the corporate entity, the motive of the incubator their eligibility criteria for incubation

However, The financial capacity and Inclination for incubation, a basket of services offered by the Incubator, return realization from Incubated startups.

Therefore, Standalone Incubation Models As the name suggests, such incubators are not associated with any corporate house or academic institution.

Various models exist for standalone incubation particularly, such Incubators just provide the physical infrastructure support to a Start-up in exchange for a fixed fee.

The start-up benefits from reasonably priced facilities and moves out once it can have its independent office space.

However, more often than not, an incubator also provides mentoring and guidance support to a startup.

However, Some even provide initial funding in exchange for a stake in the city of the start-up.

Virtual incubation programs are run on the web so that startup get benefit in long run.

The prospective start-ups can learn various aspects of building a business. Can network, get administrative

Technology Business Incubator (TBI)

IIT Delhi has been conceived, programmed and implemented by the Foundation for innovative and Technology Transfer (FITT)

– the Industry interface unit of the institute.

I began its operations in 19992000 TBI, IIT Delhi has an infrastructure oread over 7,500 sq ft. and can accommodate up to 15 companies at a time.

The start-ups are generally allowed to be in the incubator for a period of two years.

Some may be allowed to stay longer if the scope of work requires.

The incubator makes available MSME and DST (Department of Science and Technology) grants for the start-up’s funding needs.

Start-up Village

Start-up Village is a technology business incubator in Kochi, Kerala, also India’s first public-private enterprise run by the government of Kerala.

basically, The promoters of start-up village comprise of Department of Science and Technology, Government of India

Technopark Trivandrum and Wireless Kris Gopalakrishnan, co-founder of Infosys and the most successful IT entrepreneur from Kerala, is the chief mentor at Start-up Village.

The Government has earmarked Rs. 100 crore for Start-up Village and intends to incubate over 1000 student tart-ups in 10 years.

Students are offered various incentives to be a part of this incubator.

The incentives comprise of exemption from attendance requirements at college, face marks, and tax exemption for business generated by startups incubated within the premises of startup village.

Start-up village offers both, regular and virtual incubation for start- ups.


GSF is a private tech start-up accelerator.

Basically, It has a multi-city presence in In – Delhi, Mumbai and Bangalore GSF intends to promote innovation and entrepreneurship in India through angel and seed investing


IIM Bangalore is a physical incubation especially, facility at IIM Bangalore.

It also offers support services uprising of office space, power and infrastructure, finance, legal, and HR exercise.

Especially, Mentoring is provided to the start-ups from the eminent faculties of institute.

The source of funding for the incubator is primarily from government and It also provides seed capital to the start-ups.

Indian Angel Network

Indian Angel Network incubator was established with the support of the Depart of Science and Technology and National Science & Technology Entrepreneurs.

Similarly, the Development Board have commenced its operation in the year 2 year’s

That is, India’s first, largest and only national network of angel investors investing start-ups and early-stage ventures, creating new wealth and employment converting job seekers to job creators.

It has both, Institutional and India membership comprising of entrepreneurs and executives.

Generally, From India and overseas It makes investments in start-ups and early-stage start-ups a potential to scale high

Moreover, It has funded around 50 start-ups from multiple sectors like IT, mobile, eCommerce, gaming, and education

Center for Innovation

Incubation and Entrepreneurship (CIIE), IIM Ahmedabad CHE.

Therefore, It has been set at IIM Ahmedabad with support from the Government of Gujarat and the Department of Science and Technology.

The businesses incubated by CIIE are from the areas of healthcare, as well as internet and mobile technology, social sector start-ups clean technology, etc.

technology business incubation

India’s start-up Ecosystem

The government recognizes the need for developing the ecosystem for sup porting the growth and development entrepreneurship in India.

In this regard, The government has also taken several policy-level decisions as well.

A Report of the Expert Committee on Innovation and Entrepreneurship published listed by Niti Aayog in August 2015,

Also, Says that the Finance Minister in his Budget Speech 2015-16 announced the Government’s intention to establish a mission

Such as, the Atal Innovation Mission (AIM) and stated that initially a sum of Rs. 150 crores.

Hence, be earmarked for promoting a culture of entrepreneurship and innovation in India.

The key objectives of the AIM will be:

(a) To create an umbrella structure to oversee innovation eco-system of the country

(b) To provide platform and collaboration opportunities for different stakeholders

So, they can study and suggest best and novel practices are adopted by different stakeholders in the innovation chain


business incubator is a company that helps new and startup companies to develop by providing services such as management training or office space.


1) what is business ?

A business is an organization where people work together.
In a business, people work to make and sell products or services. A business can earn a profit for the products and services it offers.
The word business comes from the word busy, and means doing things.It works on regular basis.

2) what is innovation?

Innovation in its modern meaning is “a new idea, creative thoughts, new imaginations in form of device or method”.
Such innovation takes place through the provision of more-effective products, processes, services, technologies, or business models that are made available to markets, governments and society.

3) what is business incubation ?

business incubator is a company that helps new and startup companies to develop by providing services such as management training or office space.

The National Business Incubation Association (NBIA) defines business incubators as a catalyst tool for either regional or national economic development.

4) what is startup ?

A startup is a young company founded by one or more entrepreneurs to develop a unique product or service and bring it to market.
By its nature, the typical startup tends to be a shoestring operation, with initial funding from the founders or their friends and families.



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