Where business incubators started, and what’s next

In the 1870s, we invented invention. 

Many books and graduate papers have argued why the Industrial Revolution happened when and where it did. But more than anything else, over the “long twentieth century,” as economics historian Bradford deLong calls it, science, policy and the market codeveloped the corporation and the research lab. Thomas Edison was as much an entrepreneur as a scientist.

Then, during the Second World War, more military spending went into research and development than ever before. A working paper revised in 2023 demonstrated that where R&D spending went in the 1940s influenced where patents, tech talent and high-growth entrepreneurship flourished over the next half-century. 

As researchers in lab coats professionalized processes for identifying ideas, business people in suits developed systems for commercializing those ideas. 

In upstate New York in the 1950s, the Batavia Industrial Center became the first business incubator — yes, the word “incubator” was a reference to chickens from the beginning. Others followed, commonly in response to emptying manufacturing corridors and hope in squeezing the most out of homegrown inventors and entrepreneurs. By the 1960s, what became Philadelphia’s University City Science Center was the first urban version, mixed in with messy urban renewal politics. The model mixing physical space with mentorship and basic business services began showing up across the country.

Enough examples were active by the 1980s that leaders wanted a place to convene. And so launched what is today the International Business Innovation Association (inBIA), which boasts 1200 members across 30 countries. Next week, inBIA hosts its 39th annual conference in Philadelphia. 

“Entrepreneurship unlocks tremendous economic potential,” said Charles Ross, the group’s President and CEO. “Incubators help communities harness that power.” 

Incubating tiny chickling businesses has always been different than chasing the already-fattened chickens of the corporate world. But the discipline was long seen as a fool’s errand for policymakers and civic leaders: Why focus on ideas that might not go anywhere when you can hunt for those that have already become established businesses?

Well, for one, it’s getting harder to move big business. Second, entrepreneurship is booming, so economic development is undergoing a renaissance in what is lovingly called ecosystem building. Around the world, when economic development leaders seek examples of where to find hometown startups, they often look to a member of Ross’s association. Entrepreneur needs are different in their early days.

“Entrepreneurs consistently tell us community is the most valuable part of incubation programs,” Ross said. So those entrepreneurs go, and stay, where they can find community, which typically looks like programming, resources and identity — all of which is aided by storytelling, a topic that features at the inBIA conference. 

“Entrepreneurship is a team sport,” Ross said, “but it’s also a lonely endeavor. Physical spaces foster community, trust, and sharing, essential for entrepreneurial success.”

His members range in size from big institutions to entrepreneurship centers that pop up at colleges and universities, like ones at Boie State and Coppin State. On average, members receive as much as 15% of their funding from federal sources, including the Department of Commerce and the National Science Foundation. That means current DOGE-powered budget battles aren’t existential but threatening.

Business incubation started in the Eisenhower years, was formalized in the Reagan 80s and  grew under Clinton and Obama. Entrepreneurship is bipartisan and incubators show up in places that tilt both Republican and Democratic, so Ross is confident their work will continue. 

“Place-based entrepreneurial support enables community, trust, and sharing — all crucial for startup success,” Ross said. “We need entrepreneurs now, as much as ever.”