Incubators have an important role to play. Along with broader structural and institutional
reforms and investment into skills and infrastructure, they can help build and improve
effective innovation systems and enable the innovation needed to deliver the Sustainable
Development Goals (SDGs) in the SPECA countries. Business incubators can, if structured
effectively and in coordination with other support measures, be one of the most
important tools to support the initial stages of the life cycle of innovative initiatives –
pre-seed, seed, start-up, and scale-up. In transition economies, the potential of business
incubators to increase economic competitiveness and tackle various social challenges
(e.g. unemployment, poverty) is enormous. At the same time, this potential is limited
by a number of challenges associated with poor infrastructure development (including
information and communication technologies – ICT), limited private-sector research and
development (R&D), lack of incentives to start a business, gaps in accessing finance and
issues in human capital development that BIs face.

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