A dynamic process of business development that helps start-up businesses grow and create a stable base for their operations. Incubators provide a variety of services, such as management assistance, financial assistance, and access to other professional and technical services. They also may provide marketing support. Incubators provide entrepreneurial firms with shared office space and equipment, support services, conference rooms, access to equipment, and flexible leases. Incubators also may focus on companies in one industry or in a niche industry. Often they are non-profit.

U.S. business incubators began in the 1970s, although the oldest one began in Batavia, New York in 1959. They were created from three concurrent events, according to the National Business Incubation Association, which was formed in 1985. Incubators came from an attempt to use old, abandoned factory buildings in distressed areas of the Midwest and Northeast by subdividing them for small firms. Incubators also received a boost from an experiment funded by the National Science Foundation to foster entrepreneurship and innovation at universities. Finally, successful entrepreneurs wanted to encourage others and provide support to emerging companies.

The U.S. Small Business Administration also was a strong promoter of incubators, especially from 1984 until 1987. During that time, the number of incubators grew from just over 20 annually to more than 70 by 1987. The agency held a series of regional conferences and published a newsletter and incubator handbooks.