Designing Corporate Incubators for Strategic Value Creation

Abstract

As market dynamics accelerate, companies are increasingly using open innovation to complement internal R&D. Corporate incubators have become a popular way to access new technologies and foster entrepreneurship, though there is still limited insight into how they should be designed to create value for the company. This master’s thesis explores how corporate incubators can be designed to create value for the parent company. The study focuses on the strategic, structural, and operational design choices involved in establishing and running a corporate incubator. This study is based on 23 semi-structured interviews with people working in Swedish corporate incubators, startups, venture capital firms, and public organizations. Even though the incubators are set up and run in different ways, several common patterns and challenges were found. By combining insights from the interviews with earlier research, the study presents eight key components that companies should think about when designing a corporate incubator: strategic focus, source of ideas, governance, location, equipment, access to firm’s resources, funding, and networks. These areas are important for building an effective incubator. The study also identifies four main types of values that incubators can bring to the parent company: helping with technology development, promoting an entrepreneurial culture, spotting new trends, and improving the company’s brand. The discussion explains which components are especially important for creating each type of value. The findings underline the importance of tailoring the incubator’s design to the parent company’s strategic goals while remaining open to external influences. Different startups, objectives of the incubators and cultural challenges affect how the incubator should be designed. The study provides insights for firms aiming to launch or refine a corporate incubator and guidance on how design choices influence the type and extent of value generated.