What does an incubator mean in business?

Incubators are usually composed of an internal team focused on testing and developing ideas into concepts potentially viable for market launch.

What is the purpose of an incubator?

The purpose of an incubator is to test and develop technologies and/or ideas into market validated concepts that can then be commercialized. If the concepts are close enough to the core, the concepts oftentimes move back into the traditional product team for deployment.

What are incubator examples in corporate innovation?

One of the most successful incubator examples in corporate innovation is IBM’s Emerging Business Opportunities model. In 1999-2010, IBM was being disrupted by hardware commoditization, and value shifting to software and they were missing tech growth trends. IBM’s objective was to transform from a provider of best in class technology to a trusted advisor for business value. IBM launched Emerging Business Opportunities​ (EBO) to spearhead new solutions and value propositions. Seven EBOs were launched in the first wave; 28 were eventually funded at the corporate level, including IBM Life Sciences. IBM Life Sciences, became a $5B business inside of 3 years; a unit that ultimately led to the creation of Watson. The EBOs were co-owned by BUs and Corporate Strategy and both corporate and BUs invested in a central fund of ~$100M to fund the EBO portfolio. EBOs had dedicated teams, and access to BU resources. This incubator model enabled IBM to build a robust portfolio of new ventures. At its peak, EBO revenue contribution surpassed acquisition revenue.