The Evolution of The Incubator Past Present and Future

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IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 68, NO.

1, FEBRUARY 2021 265

The Evolution of the Incubator: Past, Present,


and Future
Brendan Galbraith , Member, IEEE, Rodney McAdam , and Stephen Edward Cross , Life Fellow, IEEE

Abstract—The evolution of the incubator is retraced from the corporations, investors, universities, and regional government
foundational research in the 1950s and 1960s of Research-on- departments. Incubators have provided a fascinating arena for
Research—that explored the R&D process in a number of contexts researchers due to the heterogeneity among incubators and in-
to derive and test theories of organizational behavior. In this paper,
we review the next phase of this evolution, starting with seminal cubator firms in terms of their success and performance [2] and
incubation research in the early 1970s and, we reflect on the pro- the implications of what works with management practices, cor-
lific growth of incubation research and practice, as well as new porate strategy, and university and government policy. As entire
challenges that lie ahead for the next phase of incubation. The in- industries are disrupted with technology and other megatrends,
cubation field has expanded to include a wide range of models and so too, are the management practices and business models of
a plethora of spin-off terminology that have been used interchange-
ably, with the emergence of the most recent model—the accelerator. an eclectic range of organizations, including the incubator. In
Our historical critical review of the evolution of the incubation field the most recent instantiation of incubator and related technol-
is used to ask: in this current era of technological change, what can we ogy transfer models, additional offshoots have evolved such as
learn from the past? We reflect on this question in an attempt to help virtual models, matchmaking platforms, open innovation inter-
direct researchers in their endeavors to contribute to the next gen- mediaries, and niche incubators with a focus on sustainability.
eration of incubation research. This paper presents lessons learned
from prior research and provides a range of indicative areas for Moreover, the last decade has heralded the arrival of an ap-
further empirical studies at four levels of analysis. parently new type of incubator, that has quickly gained global
attention—the accelerator. In the United States alone, it is esti-
Index Terms—Accelerator, incubator, innovation management,
research-on-research, technology transfer.
mated that 6000 start-ups have participated in 650 accelerators
and have collectively raised over $30 billion in capital [3]. There
are differences between the criteria and features of incubator and
I. INTRODUCTION accelerator models, and a tension amongst researchers whether

T HE global interest in the incubator phenomenon and its the accelerator can be considered a new generation incubator
implications for management practice and, truly support- model [4] or a new form of entrepreneurial support organization
ive policy development has burgeoned over the decades. There [5]. This is discussed in more detail later in this paper. Our aim
has been a surge in the growth of incubators, initially in the is to integrate the foundational Research-on-Research body of
United States, but this has quickly spread throughout Europe work on the scientific organizational management of the R&D,
and Asia. It is estimated that there are more than 7000 incubators with the origins the incubation research. As we retrace this im-
around the world, most of which are supported by local or na- portant, and seemingly overlooked, foundational work, we use
tional governments [1]. As such, a multitude of related terms has this historical review to ask: what can we learn from the past, in
been attached to these third-party entities in the entrepreneurial order to help provide direction to researchers.
ecosystem, ranging from Science Parks, Innovation Centers, Re- As the IEEE Transactions on Engineering Management
search Parks, and Business Incubators. This worldwide growth (TRANSACTION) enters its seventh decade it is timely to look
has spurred the emergence of a wider constituency of incubator back and retrace the roots of incubator research in the TRANS-
and technology transfer models, often with overlapping func- ACTION (and other journals) and critically review this in light
tions and objectives and an eclectic range of sponsors including of the apparent, latest instantiation of incubation–the accel-
erator. Historically, the TRANSACTION has played a key role
Manuscript received September 25, 2018; revised February 8, 2019; accepted in some of the foundational research preceding incubation–
March 7, 2019. Date of publication May 15, 2019; date of current version from the origins of Research-on-Research, and later, to sem-
November 13, 2020. (Corresponding author: Brendan Galbraith.) inal papers in incubation. Moreover, a core objective of the
B. Galbraith is with the College of Business, Zayed University, Abu Dhabi,
United Arab Emirates, and also with the Department of Management, Leadership IEEE Technology Engineering Management Society (TEMS)
and Marketing, University of Ulster, BT37 0QB Jordanstown, U.K. (e-mail:, is moving product/services from idea to market and with the
Brendan.Galbraith@zu.ac.ae). TRANSACTION being the premier journal that is housed under
R. McAdam is with the Ulster Business School, University of Ulster, BT15
1ED Belfast, U.K. (e-mail:,r.mcadam@ulster.ac.uk). the TEMS umbrella, a realignment with evolving incubation re-
S. E. Cross is with the Office of the President, Georgia Institute of Technology, search is timely, from both, research and management practice
Atlanta, GA 30332 USA (e-mail:,cross@gatech.edu). perspectives.
This paper has supplementary downloadable material available at
http://ieeexplore.ieee.org, provided by the authors. The paper is organized as follows. Section II charts the
Digital Object Identifier 10.1109/TEM.2019.2905297 development of Research-on-Research and its impact on the

0018-9391 © 2019 IEEE. Personal use is permitted, but republication/redistribution requires IEEE permission.
See https://www.ieee.org/publications/rights/index.html for more information.

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266 IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 68, NO. 1, FEBRUARY 2021

R&D and engineering management field. Section III briefly re- Rubenstein was a trailblazer in how he helped shape the re-
views the origins of the incubation field and critiques emerging search agenda and he directly communicated the critical part
incubator models and avenues for further research. Section IV that practicing industrial managers were expected to play. As
concludes this paper. Ed Roberts [19] reflected, this occurred in an era were many
of the relatively few managers in the reading audience doubted
II. RETRACING RESEARCH-ON-RESEARCH that academics had a basis for informing them, and they cer-
tainly questioned how much performance improvement might re-
In many of the earliest issues of the (TRANSACTION) and under sult from reading the TRANSACTION …and some related journals
the stewardship of its founding editor, Dr. Albert Rubenstein,
were even outright hostile to academic contributors. Rubenstein
there was a concerted drive to explore research on the R&D was a proponent of the classic counter argument to this skepti-
process to derive and test theories about organizational behavior
cism, in that nothing is so practical as a good theory [20]. As
in the R&D context [6], [7] and to understand how to resolve
Van de Ven [21] explains: Good theory is practical precisely
the gap between knowledge and its application [8], [9]. This because it advances knowledge in a scientific discipline, guides
fledgling work on the management of research, development and
research toward crucial questions, and enlightens the profession
engineering became known as research-on-research and many of management.
of the earliest studies were carried out by social scientists, such This research agenda, championed by Rubenstein and oth-
as psychologists, sociologists, and economists—some of whom
ers [18], gained momentum and in particular the TRANSACTION
had a prior technical background [10], [11]. reported advancements of Research Laboratories that was oc-
The rapid development of postWorld War II industrial and curring at MIT [22], Northwestern, [7], the Georgia Institute of
research laboratories was the initial focus of this evolving man-
Technology [23], Bell Laboratories [24], and Lockheed [25].
agement science [12]–[15]. The goal was to advance theory In the early 1970s we started to see a shift on the field’s focus
and practice—the art—of R&D and engineering management. from R&D and engineering management to innovation man-
Rubenstein’s editorial pages were repeated calls for action to
agement [26] and some of the most important seminal research
management researchers to advance theoretical research to ad- came from Rubenstein’s past students, for example, James Utter-
dress what he was convinced was the serious lack of under- back’s [27] work on the process of innovation. Around the same
standing of what takes place in the complex process of R&D
time, the TRANSACTION published the seminal research into in-
and engineering management [7], [16]. At the same, Ruben- cubator organizations; charting the characteristics of technical
stein highlighted that in order to make progress there had to be entrepreneurs in incubators in MIT [28] and incubator spin-offs
recognition that this endeavor was a two-way street. It was in-
in Stanford and Silicon Valley [29].
cumbent on practicing R&D and engineering managers to seize As the R&D and engineering management field evolved and
their role in helping to improve the art of management by test-
broadened into innovation management, the research foci of gov-
ing, developing, adopting and implementing changes in R&D
ernment, university and industrial research laboratories trans-
management, according to emerging academic management re- gressed to fledgling incubator organizations. Over the years a
search at that time [17]. Writing in an editorial in December
wide range of journals provided sustained coverage of incuba-
1966, [17] Rubenstein was unsparing: tor and related research, in particular, Research Policy, Tech-
Until sufficient effort is put into these latter aspects of the Manage- novation, Journal of Business Venturing, and The Journal of
ment of R, D & E process by the managers themselves, the results of Technology Transfer. Other significant outlets included: R&D
basic research into management will just lie in the libraries and on Management, Journal of Small Business Management, Technol-
the shelves, with little effect on the art of managing R, D and E. ogy Analysis and Strategic Management, and The Journal of
An early research paper by Ed Roberts, at that time an As- Product Innovation Management. Post-Rubenstein, the TRANS-
ACTION grew in several other important areas, but with notable
sistant Professor at MIT, was an agenda setting critique of the
research focus that was taking place in this era as well as the exceptions such as [30] and a Special Issue by Link et al. [31]
dissemination of a novel theoretical contribution Toward a new the TRANSACTION was less engaged in the incubator research
theory in research and development [18]. Of course, it would be field. Moreover, the legacy of the foundational body of work
very difficult to imagine that this was the case if one reviews the on Research-on-Research in the pages of this publication and in
mere five Google Scholar citations affiliated to his 1962 sem- other leading journals over years, is seemingly omitted in histor-
inal paper Toward a new theory for research and development ical reviews of the organizational and management of science of
published in Industrial Management Review.1 Roberts [18] cri- R&D. Before incubation was conceptualized, there was a rich
tiqued that management researchers were working in the wrong vein of foundational organizational and management science on
areas and with the wrong viewpoints, namely: 1) management how industrial and government labs were attempting to convert
research had emphasized pieces rather the process of R&D; R&D into viable products. To be clear, Research-on-Research
2) emphasized techniques rather understanding; 3) those that is not incubation, but one of the foundational predecessors to
did attempt to analyze R&D used a framework which hindered the global phenomenon of incubation. Albert Rubenstein, who
rather than helped understanding [18]. was referred to as Mr. Research-on-Research by many of his
peers [32], played a key stewardship role in championing this
vital, foundational stream of research. This paper will now turn
1 Industrial Management Review was later retitled to Sloan Management to briefly retrace the emergence of the incubation movement and
Review research field and reflect on future research avenues. This will

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GALBRAITH et al.: EVOLUTION OF THE INCUBATOR: PAST, PRESENT, AND FUTURE 267

be followed by a review how the development the incubation re- and Innovation Intermediaries have been attached to these third-
search field can be shaped by future challenges as well as learn party entities in the entrepreneurial ecosystem. Often these terms
from the past. have been used interchangeably, especially, Science Parks and
Incubators.
The study of incubators [28], [29], [30], [38]–[45] and science
III. MANAGEMENT OF INNOVATION—INCUBATORS parks [46]–[53] has been the focus of prolific empirical research
AND ACCELERATORS
for several decades. Attempts to cluster this multitude of similar
The origin of incubators is often traced back to the 1950s, first, terms have led to several typologies. For example, Grimaldi and
with the opening of Stanford Research Park that helped seed the Grandi [54] mapped business incubators into four categories:
Silicon Valley and the Industrial Center of Batavia, New York, business innovation centers, university business incubators,
in 1959 [33]. Around the same time, both the MIT Instrumen- independent private incubators and corporate private incubators.
tation Laboratory and MIT Lincoln Laboratory, having under- A common denominator of all of these terms or entities is that
taken substantial defense technological innovations and space they, in some manner, exist to play a role to support and harness
technologies, were considered to be major source organizations new technology-based start-ups. Moreover, at the incubator
for new high technology enterprises [34]. Faculty entrepreneur- level, the formative work was dominated by configurational-
ship in the MIT labs developed organically, with many MIT orientated studies [33] and was a dearth of process studies that
researchers electing to moonlight on a part-time basis, whilst attempted to shine light in the black boxes of business building
retaining full time faculty positions [34]. Both, the subsequent and commercialization processes [47]. Some incubators were
high-tech clusters of Silicon Valley and Boston-Route 128 were focused on a specific industry while others recruit businesses
considered to be exemplar environments for the growth of high- from all sectors [2]. As new models emerge, such as technology
technology start-ups and successful university and corporate platforms, matchmaking platforms and accelerators, there is a
spin-offs. An interesting variation was that the Boston-Route need to move away from descriptive and studies of the attributes
128 model stood out with a much higher degree of regional en- of these new forms and steer a research focus on value-added
trepreneurial dependence upon one major academic institution, processes and business models [55]. Moreover, in this new
namely, MIT [34]. In comparison, an early study found that only technological era, we need to understand how new incubator
eight out of 243 technical firms in the Palo Alto area had their models are positioned to address megatrends, digitization, big
origins with Stanford University [29]. data, blockchain, and the platform economy. Related to this,
Since the 1960s, the Palo Alto area was home to some of the we need to better understand emerging methods such as design
most impactful corporate incubators such as Fairchild Semicon- thinking, processes, strategies and collaborative models of
ductor and Ampex [29]. As the incubator concept evolved in the innovation at level of embryonic start up. To effectively do so,
1970s and 80s, Smilor [30] reported that two broad strategies we need to further distinguish, what is known as the incubatee
began to emerge. The first approach was to renovate older or va- [33] level of analysis. Incubatee tends to refer to the embryonic
cant buildings and lease the space at relatively inexpensive rates, start-up firm (spin-in or spin-off). However, this can be further
in what was largely a property management endeavor. The sec- differentiated as embryonic start-up firm, entrepreneur (lead
ond strategy was a more conscious attempt to build companies founder) and entrepreneurial team. The latter two areas of
and leverage resources to help companies grow. This second entrepreneur and team level have received considerably less
strategy became a greater concern in the United States in the attention in the incubation literature than the start-up firm level.
1970s following the concern about the apparent deterioration of At the entrepreneur or team level, there has been a much recent
national comparative advantage in manufacturing and, in partic- empirical work that has explored innovative behavior in teams
ular, the increasing competition from Japanese firms [34], [35]. from diversity [56], psychological safety [57], and psychologi-
Policy-makers, influenced by the success of Silicon Valley and cal empowerment [58] perspectives. There is a need for further
Route 128, came to believe that universities could undergird exploration of entrepreneurial behaviors at individual and team
a response to Japanese success [36]. The United States would level within an incubation setting.
compete by introducing the newest science-based technologies; Undoubtedly there have been advancements and offshoots of
many of which would be developed by research universities [35]. incubator and technology transfer models that have evolved in
This paved the way for a series of reforms that targeted the trans- the form of virtual models [59] and matchmaking platforms [60],
fer of university research to industry with the enactment of the niche incubators with a focus on sustainability [61] and social
Bayh-Dole Act 1980 that significantly altered how universities impact as well as the arrival of an apparently new type of incu-
commercialized and diffused technologies. bator, the accelerator. The accelerator has already generated a
Since then, there was a further surge in the growth of incuba- number of terms such as corporate accelerator [62], seed ac-
tors, initially in the United States, but this was quickly replicated celerator [63], or technology accelerator.
throughout Europe and Asia. Today, incubators are a worldwide The first accelerator, Y Combinator, was founded by Paul
phenomenon and are integrated in most developed and devel- Graham in 2005 in Cambridge, Massachusetts, before mov-
oping nations. Terms such as Science Parks, Research Parks, ing to the Silicon Valley in 2007 [63] Since then, it has be-
Science and Technology Parks, Business Incubators, Techno- come a worldwide phenomenon but the current academic litera-
logical Business Incubators, University Incubators, Innovation ture on accelerators is scant, and mostly amounts to descriptive
Centers, Enterprise Centers, Business and Technology Centers, studies [64]. The current research on the accelerator has reported

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268 IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 68, NO. 1, FEBRUARY 2021

TABLE I
INCUBATION LEVELS OF ANALYSIS WITH INDICATIVE RESEARCH AREAS

differing interpretations of this latest instantiation. There is the various sponsors and together with the previous discussion, we
supported analysis that an accelerator is essentially a special outline four levels of analysis alongside indicative research ar-
type of incubator or new generation incubation model [55] al- eas that may be useful in developing what incubation can be and
beit, with several configurational differences, such as they are what it can do (see Table 1).
cyclical, shorter-duration and cohort-based programs rather con-
tinuous, and longer-duration support offered by incubators [64]. IV. BUILDING ON THE LEGACY OF PAST RESEARCH
In contrast, [5] argue that accelerators are a new form of en-
It is widely accepted that virtually no industry is safe from
trepreneurial support organization and different to an incubator.
technological disruption and the effects of this dynamic change
Goswami et al. [5] report that accelerators contribute to ecosys-
are widespread. It is not only legacy businesses that need to
tems in a way that is distinct from, but supportive of, building
pivot and adapt in their business environment, but stakeholders
individual ventures. There are other new collaborative ecosys-
throughout the entrepreneurial ecosystem are challenged to re-
tem models emerging. For example, it has been reported [65] that
view their modus operandi. For example, in Finland, the connec-
a new urban model –innovation district is evolving. Innovation
tivity of open data and artificial intelligence has given rise to the
districts are geographic areas where leading-edge anchor insti-
platform economy—that in turn, helps to reshape the contours
tutions and companies cluster and connect with start-ups, busi-
of the Finnish entrepreneurial ecosystem. Increasingly, all kinds
ness incubators and accelerators. They are physically compact,
of services in nonobvious sectors are being digitized, products
transit-accessible, and technically wired and offer mixed-use
are increasingly becoming servitized and classic consumption-
housing, office, and retail [65]. Related to this, are quadruple-
driven (and investor-friendly) razor and razor blade business
helix models, such as urban living labs that are reported to be
models are being pervaded with sharing and leasing models
bringing existing constellations of urban actors together in new
of consumption. The convergence and hyper-connectivity with
ways to create more collaborative and experimental ways of
platform technologies such as AI, VR, AR with open data is
doing urban development [66]. Other variations of this type of
already seeding a new generation of start-ups. The much-hyped
multistakeholder collaboration are evident with quintuple helix
foundational technology2 —blockchain, has been the focus of
models that address sustainability challenges [67]. Inter alia, net-
widespread claims that it is going to revolutionize business and
working is important for embryonic start-ups in incubators [44],
redefine companies and economies [69]. This, ever-changing
[68], and thus, the emergence of quadruplex and quintuple-helix
and dynamic context presents new challenges to regional in-
innovation systems offer interesting regional levels of analysis
novation policymakers, innovation funders and third-party in-
for incubation.
novation intermediaries such as incubators and accelerators. In
Hackett and Dilts [33] report their systematic review of in-
cubation research according to community, incubator, incubate
levels of analysis. However, as a result of significant worldwide 2 Iansiti and Lakhani (2017) define foundational technologies as having the
developments of new incubator and accelerator models, from potential to create new foundations for economic and social systems.

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GALBRAITH ET AL.: EVOLUTION OF THE INCUBATOR: PAST, PRESENT, AND FUTURE 269

parallel, we argue that learning from the past can help guide re- market matchmaking and are investing in value creation (e.g.,
search to critical research questions and enlighten the profession Facebook’s Blueprint courseware initiative) [74]. Nambisan [72]
of management. argues that there is a need to integrate digital-technology-related
First, by acknowledging the rich, foundational research and concepts and constructs with those in existing entrepreneurship
practice of Research-on-Research in industrial research labo- theories. This raises many opportunities for researchers to fur-
ratories led by, Albert Rubenstein we ask: what can we learn ther question: what the future of incubation can be or do, to
from the past? The Rubenstein era was a period of sustained support innovation in this digital and multidisciplinary context?
focus and analysis of the direction of the field and its impact Related to this, there may even be the possibility of extending
on practice. Alongside new theoretical developments were the a fifth level of analysis for incubation research, namely at the
efforts of inducing key stakeholders into translating and adopt- digital-technology level?
ing new practices—all in the pursuit of advancing the art of Third, if we are to learn from the past then researchers must
R&D and engineering management. However, at the closing of ensure they adopt appropriate research protocols when design-
Rubenstein’s 25-year editorial reign at the TRANSACTION, he ing systematic literature reviews. Scholarly research that appears
observed that compared to other functional areas of in the firm, in nonmanagement discipline journals or in a management dis-
such as marketing, finance, production and strategic planning, cipline journal that is not listed as a current top journal, is often,
our techniques have not advanced—leaving room for much im- and methodically, omitted from systematic literature reviews.
provement [16]. Moreover, it has been asserted that the uptake This is a scientific loss of both, new and classic research. Many
of academic technology transfer and innovation management classic research studies that were reported in older, scholarly
research and models into management practices is under lever- journals, which no longer feature in the top tier echelons of
aged [26]. If we pose the rhetorical question of what manage- various journal-ranking lists, are often excluded. As we are re-
ment practices have emerged from more than half a century of minded of, in numerous reflective commentaries of the field3
research into incubation?, a compelling answer is not immedi- and journal and citation analysis studies, [32], [75] the frequent
ately apparent. In part, it could be argued that this is because variance in the titles that are considered to be the most important
there is a plethora of incubator models with differing strategic field journals or a top tier journal, is in itself, a characteristic of
objectives, operating environments and national contexts. One our field. We can only learn from the past, if we are adopting
generic lesson we do know is that the best incubator models are literature review protocols (especially systematic reviews of the
those that realize that they are not standalone entities, and clev- field) that are inclusive of scholarly research, regardless of do-
erly interact with and leverage the resources within their own main discipline or current journal ranking index. To qualify this
regional environments [40]. If we turn to the development of the point, a more inclusive and robust approach for reviews of the
incubator field, research into traditional incubator models were literature field, would help complement (not replace) systematic
dominated by configurational-orientated studies and seldom and credible research in the field that benefits from a high level
produced managerial insights into their value-added processes of partitioning [76].
[70], [71] and so far, the largely descriptive research (with no-
table exceptions [5], [55]) in accelerators is following the same V. CONCLUSION
path.
The global interest in the incubator phenomenon and its im-
Second, we are reminded that from its origins, the R&D
plications for management practice and, truly supportive pol-
and innovation management field has developed with schol- icy development has burgeoned over the decades. This has
arly research from many disciplines—often appearing in non-
prompted the emergence of a wider constituency of incubator
management discipline journals. It is obvious that additional
and technology transfer models, often with overlapping func-
interdisciplinary research studies will be of value. This should tions and objectives. As entire industries are disrupted with
cover sub-disciplines in management as well as an increas-
technology and other megatrends, so too, are the management
ing number of related disciplines (i.e., economics, psychology,
practices and business models of an eclectic range of organi-
engineering, design, information systems, etc.). Research-on- zations, including the incubator. The TRANSACTION are posi-
Research benefitted from important empirical studies by psy-
tioned to contribute to the evolving incubator research agenda,
chologists and social scientists and likewise, we posit that en-
with recent launch of a Special Issue on Incubators and Ac-
trepreneur and entrepreneurial team levels of analysis within celerators [77] that aims to both, advance theoretical develop-
incubation is a gap that would be well served by psychologists
ment and present new insights for engineering and manage-
and other related discipline experts. If we look at the perva- ment professionals. We would encourage researchers to take
siveness and hyper-connectivity of emerging technologies, tra- appropriate steps to ensure more rigorous and inclusive literature
ditional ways and forms of pursing entrepreneurial opportunities
searches, be more interdisciplinary in their research approaches
are increasingly questioned and refashioned [72]. For example, and make additional strides to uncover valuable management
Augmented Reality will affect companies in every industry and
practices.
many other types of organizations, from universities to social en-
terprises. It will transform how we learn, make decisions, interact
3 For several examples see (2014) 50 years of engineering management
with the physical work and change how enterprises design and
through the lens of the IEEE transactions, IEEE Transactions on Engineering
create products [73]. Digital platforms are evolving to go beyond Management, 51, 4.

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270 IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT, VOL. 68, NO. 1, FEBRUARY 2021

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