The surge in the number of tech start-ups in China has made incubators a profitable business. Almost US$ 16 billion was put in tech start-ups in the country in the first eight months of 2015, posting a significant growth rate from the US$ 3.8 billion the same period of the year prior, according to an estimate by AVCJ Research. Investors seem to be taking heed of these developments. On the main street of Beijing’s technology hub Zhongguancun alone, for example, 17 new incubators were added for within a one-year period, from 23 to 40 incubators in 2015, according to Beijing-based media group Caixin.
Business incubators are platforms that offer benefits to start-ups other than financial support. These benefits range from marketing and management training to affordable office spaces. This form of investment is already widely known throughout the US and Europe. In China, it has attracted the attention of not only private entities but also that of the government. For instance, state-owned Tsinghua Holdings Ltd hopes to set up incubators in the next five years in more than 20 countries to help fledgling Chinese firms that specialise in innovation, which will be done through either partnership or acquisition.
Other ways in which business incubators or programmes designed to incubate/ accelerate businesses may include helping start-ups learn, innovate, have access to funds (e.g., funds coming from crowdfund, angel investors and venture capitalists) and transform their innovative ideas into marketable products. A network of global mentors that include top personalities in academics, experts in various fields and high-ranking officers from publicly listed companies may also prove useful to incubators helping start-ups succeed in their businesses and therefore serve as agents that incubate wealth in a country.