Corporate incubators as knowledge brokers between business units and ventures: A systematic review and avenues for future research

Abstract

Purpose: Through digitization and globalization, corporate incubators have gained new relevance as tool to foster innovation within established companies. Although many studies address business incubators in general, the specifics of corporate incubators are often neglected in the literature. Design/methodology/approach: The author systematically reviewed academic articles regarding corporate incubation, published on peer reviewed journals. In the course of a subsequent analysis, open questions for further research were identified and addressed. Findings: Corporate incubators differ significantly from business incubators. Based on an analysis of 45 academic papers, the main features of corporate incubators have been identified and addressed. Originality/value: The present work suggests that it is one of the first that systematically analyze the literature on corporate incubation. Based on the literature review, a holistic framework was constructed that highlights the different elements of corporate incubation and also considers the incubator as knowledge broker between business units and ventures .

Full text

Corporate Incubators as Knowledge Brokers between Business Units
and Ventures: A Systematic Review and Avenues for Future Research
Michael Kötting
1
University of Hohenheim, Wollgrasweg 49,
70599 Stuttgart, Germany, E-mail: michael.koetting@zeb.de
Purpose: Through digitization and globalization, corporate incubators have gained new
relevance as tool to foster innovation within established companies. Although many stud-
ies address business incubators in general, the specifics of corporate incubators are often
neglected in the literature.
Design/methodology/approach: The author systematically reviewed academic articles
regarding corporate incubation, published on peer reviewed journals. In the course of a
subsequent analysis, open questions for further research were identified and addressed.
Findings: Corporate incubators differ significantly from business incubators. Based on
an analysis of 45 academic papers, the main features of corporate incubators have been
identified and addressed.
Originality/value: The present work suggests that it is one of the first that systematically
analyze the literature on corporate incubation. Based on the literature review, a holistic
framework was constructed that highlights the different elements of corporate incubation
and also considers the incubator as knowledge broker between business units and ven-
tures.
Keywords: Corporate incubation, Innovation management, Technology management,
Knowledge transfer
Paper type: Literature review
1
This is a preprint version. For the final version refer to “Corporate incubators as knowledge brokers be-
tween business units and ventures: A systematic review and avenues for future research”. M. Kötting.
European Journal of Innovation Management, 2019, 23 (3): 474-499. https://doi.org/
10.1108/EJIM-12-2017-0201

2
1 Introduction
The digitization and globalization of the economy are affecting companies from all in-
dustries and confronting them with an increasingly changed market dynamic (Tushman
and Anderson, 1986). Although this market dynamic can represent a great opportunity
for companies to gain new competitive advantages, established companies that are unable
to adapt to the associated changes see themselves as confronted by especially tremendous
challenges (Bower and Christensen, 1995). To meet such market changes, established
companies must develop new knowledge through exploration and use this knowledge to
create new products and services (O'Connor and DeMartino, 2006). The shift from the
standardized use of existing knowledge, as practiced over many years, towards an explo-
ration of new knowledge with diverse uncertainties is an enormous challenge for many
established companies (March, 1991).
As a concept aiming to solve the described problem, corporate incubation has begun to
take root in practice (Weiblen and Chesbrough, 2015; Hausberg and Korreck, 2017). Lev-
eraging corporate incubation implies the creation of a new organizational entity to de-
velop new knowledge and to transfer this knowledge through a constant process to busi-
ness units (O'Connor and DeMartino, 2006). The generation of new knowledge takes
place through the development of internal and external ventures. The knowledge gener-
ated in the course of the development is combined with existing knowledge of the busi-
ness units in order to generate new innovation as result of the corporate incubation pro-
cess (Becker and Gassmann, 2006b). In this context, the corporate incubator serves as
owner of the incubation process and ensures as knowledge broker the knowledge transfer
between the ventures and the business units (Gassmann and Becker, 2006).
Although the use of corporate incubation appears promising at first glance, the sustaina-
bility of corporate incubators requires critical reflection. An analytical perspective on the
past shows that roughly a third of companies implementing corporate incubators have
failed (Becker and Gassmann, 2006a, 2006b). The high failure rate is especially attributed
to incubators not meeting the promised objectives of the parent company and the business
units (Kambil et al., 2000; O'Connor and Ayers, 2005; Gassmann and Becker, 2006). In
addition to the expectations of the parent company, the expectations of the ventures have
also frequently been disappointed (Zedtwitz and Grimaldi, 2006). Therefore scientific

3
approaches to explain the phenomenon of corporate incubation and to give practical rec-
ommendations are needed.
Whereas an abundance of scientific literature has been published regarding business in-
cubation in general (e.g., Hackett and Dilts, 2004; Albort-Morant and Ribeiro-Soriano,
2016), the research field of corporate incubation still shows potential for further develop-
ment (Uittenbogaard et al., 2005; Evald and Bager, 2008; Ahmad, 2014; Pauwels et al.,
2016; Hausberg and Korreck, 2017). The existing literature regarding business incubation
takes a homogeneous look at the issue, neglecting often characteristics and specificities
of different forms of incubation (Becker and Gassmann, 2006a; Aaboen, 2009; Barbero
et al., 2014). While the basic processes and support services between different forms of
incubators may not be substantially different (Grimaldi and Grandi, 2005), corporate in-
cubators differ in the embedding in an existing organizational structure and the pursuit of
strategic goals like generating relevant knowledge for the business units (Gassmann and
Becker, 2006). Following the classification of Grimaldi and Grandi (2005), it is noticea-
ble that Business Innovation Centers and Independent Private Incubators, in contrast to
Corporate (Private) Incubators and University Business Incubators, only aim for a unilat-
eral knowledge transfer from the incubator to the ventures. Corporate (Private) Incubators
and University Business Incubators, on the other hand, aim to establish a bidirectional
knowledge transfer. Therefore, a corporate incubator has always to consider the strategic
alignment and knowledge brokering between the business units and the ventures (Haus-
berg and Korreck, 2017). The embedding of the incubator in an existing organizational
structure and consideration of the strategic alignment with the parent company and their
business units on the one hand, and the ventures on the other hand, are unique character-
istics of corporate incubators. To be able to accommodate mentioned peculiarities of cor-
porate incubation, we are in line with existing research (Barbero et al., 2014; Hausberg
and Korreck, 2017), requiring a more differentiated examination of the phenomenon.
Intent on contributing to the advancement of the research field of corporate incubation,
the present work aims to systematically analyze the current state-of-the-art of the research
field. The goal is to derive a cohesive framework based on existing literature, allowing a
holistic view of the corporate incubation research field. Putting the process of knowledge
transfer in the center of our consideration, we will highlight the supporting elements con-
nected with the process. Moreover, the literature review should help identify open re-
search questions and provide an impetus for further research. The present work suggests
that it is one of the first that systematically analyze the literature on corporate incubation

4
with a focus on the knowledge transfer between the incubator, the ventures and the parent
company.
The present work can be divided into five sections. Section 2 is dedicated to the method
of the systematic literature review. Here, the applied methodology and associated proce-
dure is outlined in a transparent manner. Sections 3 analyzes the relevant literature and
thereby deduct the central framework. Section 4 presents the open research questions re-
sulting from the framework. Subsequently section 5 addresses the study limitations, and
summarizes the key findings of this work.
2 Review approach
The aim of this research is to construct a framework for structuring the corporate incuba-
tion literature. The framework is based on existing findings that need to be identified
systematically and analyzed substantively (Denyer and Tranfield, 2006). The recom-
mended methodological approach is therefore a systematic literature review, which al-
lows for a systematic, transparent, and comprehensible identification of relevant literature
(Tranfield et al., 2003). For this reason, systematic literature reviews are an accepted re-
search tool to obtain a structured overview of a research field (Rousseau and McCarthy,
2007) and are also accepted in the context of business incubation (Hackett and Dilts,
2004; Hausberg and Korreck, 2017).
2.1 Systematic literature search
The literature search was conducted in July 2018. The focus was on academic papers
published in the English language in peer-reviewed scientific journals (Meier, 2011;
Keupp et al., 2012; Savino et al., 2017). This approach assures the content quality of the
review because contributions in journals enjoy an excellent reputation and exert a strong
influence on the academic discourse (e.g., Podsakoff et al., 2005). For the purpose of
achieving high-quality results, the focus was particularly directed towards high-ranked
journals (e.g., Armstrong and Wilkinson, 2007). The identification of relevant contribu-
tions occurred in four steps (see Figure 1):
[Fig. 1: Systematic search and selection process]

5
Baseline. In a first step, the databases ABI/INFORM Collection, Business Source Com-
plete and ScienceDirect were searched in full-text mode (incl. title, abstract, keywords)
using the search terms “corporate” and “incubat*”. By using these databases, broad cov-
erage of academic journals could be ensured (Djokovic and Souitaris, 2008). For the
search, both search terms were linked via proximity-operator (“corporate” NEAR/2, “in-
cubat*“). This approach is mindful of the inconsistent terminology in the literature. For
instance, the literature makes use of terms such as corporate incubators (e.g., Allen and
McCluskey, 1990), corporate business incubators (Grimaldi and Grandi, 2005) and cor-
porate private incubators (Grimaldi and Grandi, 2005).
2
Through the search, 214 results
were identified. After consolidating double entries, an initial 196 articles were identified.
Thematic relevance. The second step consisted of verifying the thematic relevance of the
identified articles. The thematic relevance of an article was regarded as given if the jour-
nal of publication was assigned to the category Business, Management and Accounting
by the Scimago Journal & Country Rank. Due to this criterion, 39 articles were excluded.
Articles not named in the Scimago Journal & Country Rank were cross checked with the
Journal Citation Report, a step that eliminated an additional 34 articles cited in neither
the Scimago Journal & Country Rank nor in the Journal Citation Report. Failing to be
listed was regarded as a criterion of minor relevance of the journal, since the Scimago
Journal & Country Rank and the Journal Citation Report are accepted as leading ranking
platforms for scientific publications (Falagas et al., 2008). Hence, the second phase
yielded a total of 123 articles.
Content quality. The third step was designed to guarantee the quality of the content. The
Scimago Journal & Country Rank served as the basis for assessment. Articles published
in journals ranking in the lowest quartile of our interim search result (SJR ≤ .492) were
excluded from further consideration. Podsakoff et al. (2005) showed that the relevance of
journals ranking in the lowest quartile was negligible concerning the number of citations.
As a conclusion, contributions in these journals have no significant impact on the scien-
tific development. Consequently, 102 articles remained.
Content-related review. In the fourth and final step, the author conducted a content-re-
lated review of the remaining 102 articles. To avoid subjective bias, the articles were
reviewed using a data extraction sheet (Tranfield et al., 2003). Subsequently, 13 articles
2
Grimaldi and Grandi (2005) make use of both terminologies in their work.

6
were excluded because they did not qualify as scientific contributions (e.g., editorial,
book reviews). Another 44 articles were excluded because the topic of corporate incuba-
tion was not addressed contextually. Consequently, the literature search was completed
based on 45 remaining articles (see Table 1)
3
. As demonstrated in previous work, this is
an appropriate number of articles for a systematic literature review (e.g., Hackett and
Dilts, 2004; Klotz et al., 2014; Thywissen, 2015).
[Table 1: Analyzed corporate incubation literature]
2.2 Descriptive literature analysis
For the purpose of generating a preliminary overview, the identified articles were sub-
jected to a descriptive analysis (Tranfield et al., 2003). Table 2 shows that up to the year
2004, corporate incubation attracted little attention in the scientific literature. Beginning
in the year 2005, however, an increasing number of scientific contributions are recorded.
On a positive note, the number of scientific articles remained at a constant level over time
and up to the present day.
[Table 2: Descriptive analysis of the identified literature]
It is of special interest here, that the above mentioned journals mainly cover literature in
the domain of innovation and technology management. This observation underpins the
introduction, according to which corporate incubation is primarily a tool to foster the
innovation capability of established companies. The 45 articles are spread over 26 jour-
nals. This finding demonstrates the heterogeneous distribution of the corporate incubation
literature among academic journals.
3
A detailed presentation of the used methods and samples can be found in Appendix 1.

7
3 Corporate incubators as knowledge brokers
A corporate incubator can be characterized as an organizational unit of an established
company with a mission to generate new knowledge and to transfer that knowledge into
existing business units (Gassmann and Becker, 2006). To generate and transfer new
knowledge, the incubator selects and develops ventures and acts as a knowledge broker
between the ventures and the business units of the established company. Therefore, the
knowledge transfer is bidirectional, operating not only from the ventures to the business
units but also from the business units to the ventures. In addition to this function as
knowledge broker, integration of the corporate incubator within the parent organization
and its interaction with the business units is especially associated with a high degree of
complexity and is one of the major features differentiating the corporate incubator from
other forms of incubators. In this vein, O’Connor and DeMartino (2006), who conducted
a longitudinal study of 12 firms, concluded that the successful generation of new
knowledge and innovation is not solely dependent on the corporate incubator. Instead, it
requires the consideration of the whole organizational innovation system and the interplay
among the incubator, the parent company and its business units and the ventures. Taking
these findings by O’Connor and DeMartino into account, in the next section, we will
describe a corporate incubation framework with the process of knowledge transfer and
venture development as its central element (Fryges, 2014). This process will be supported
by the organizational units involved and by related supporting activities (see Figure 2).
[Fig. 2: Framework of corporate incubation]
3.1 Influence of the parent company
The parent company establishes the guardrails for the corporate incubator (O’Connor and
DeMartino, 2006). For this purpose, the parent company must define the objectives asso-
ciated with the corporate incubator and create appropriated conditions (e.g., organiza-
tional structure, resource equipment, and support services) for setup and operation
(O’Connor and DeMartino, 2006; Maine, 2008; Ford et al., 2010).

8
3.1.1 Major objectives of the parent company
Companies pursue particular strategic objectives with corporate incubators (e.g., Cara-
yannis and Zedtwitz, 2005). For example, Becker and Gassmann (2006) differentiate four
strategic goals in their qualitative study involving 25 cases from Europe and the US. The
authors hereby distinguish among Fast-profit Incubators, which gain financial returns by
spinning out internal noncore technology units, Leveraging Incubators, which create
breakthrough technology by acting as matchmakers between central R&D and marketing
units, Insourcing Incubators, which scan the environment for windows on emerging tech-
nologies, and Market Incubators, which support the development of complementary tech-
nology to increase the demand for the parent company’s product. Following Becker and
Gassmann (2006), Fast-profit Incubators and Leveraging Incubators focus on the exploi-
tation of existing knowledge, while Market Incubators and Insourcing Incubators focus
on the exploration of new knowledge. In addition to the exploration of new knowledge
and the exploitation of existing knowledge, the creation of an entrepreneurial culture was
identified as a common rationale of corporate incubators by Uittenbogaard et al. (2005),
who based their study on comparative research in five multinational high-technology
companies.
The literature primarily describes the exploration of new knowledge as the most fre-
quently named objective of corporate incubators. Becker and Gassmann (2006) confirm
what Allen and McCluskey (1990) found earlier in their study based on a survey of 127
incubators: parent companies are tasking corporate incubators primarily with the explo-
ration of new knowledge and the development of new products and services. These early
insights were corroborated later with qualitative works by Christensen et al. (2016), who
investigated a large German car manufacturer, and by Kim et al. (2012), who focused on
two large Asian technology companies. In a study involving workshops with twenty par-
ticipants responsible for new technology initiatives, Markham et al. (2005) also con-
cluded that established companies are mainly motivated by the generation of new
knowledge in the form of a window onto emerging technologies, market opportunities,
new business models, and channels of distribution. The authors also point out that the
success of corporate incubators predominantly lies in matching what the incubator can
provide with what the company actually needs. The parent company must therefore pro-
vide the appropriate framework conditions that allow the realization of the targeted ob-

9
jective. Finally, Chesbrough and Brunswicker (2014), who based their findings on inter-
views with 125 companies from Europe and the US, show that corporate incubators are
increasingly used as an opportunity to exercise open innovation. In comparison with other
approaches, companies thus far have attached a medium relevance to corporate incubators
as a tool for open innovation. However, it is clear that the relevance of corporate incuba-
tors in the context of open innovation has steadily increased over the past few years.
The exploitation of existing knowledge is another major rationale of corporate incubation.
In their analysis of British Telecom, Simpson and Hill (2004) report that one of the main
goals of British Telecom was to unlock some of the value contained in their technology
patents. The corporate incubator was therefore designed to leverage existing knowledge
to create value. In a quantitative analysis of 70 incubators from Spain, Barbero et al.
(2012) also demonstrated how different archetypes of incubators (Basic Research Incu-
bator, University Business Incubator, Economic Development Incubator, Private Incuba-
tor) affect the incubator’s performance. The authors were able to show that private incu-
bators create high financial returns for their parent company. This can be derived from
sales growth rates in the region of 20% for a five-year period. The authors conclude that
private incubators are especially well positioned to exploit existing knowledge to generate
sales growth.
In a case study of a large German chemical group, Maine (2008) explores to what extent
an organizational culture that enables efficient resource allocation can limit the ability to
create corporate innovation. Hence, it seems consistent that for many companies, corpo-
rate incubators aim to sustainably transform corporate culture. Using case studies, Uit-
tenbogaard et al. (2005) as well as Hughes et al. (2007) and Kim et al. (2012) have proven
that companies use corporate incubators to revitalize and transform the company into an
entrepreneurial organization by infusing an entrepreneurial spirit and streamlining its or-
ganizational processes. Moreover, Kim et al. (2012) and Hausberg and Korreck (2017)
argue that corporate incubators also represent a suitable means to steer entrepreneurial
talent towards options for the future within an established company. This finding is also
supported by Ferray (2008), who conducted an in-depth case study of France Telecom.
Vanhaverbeke and Peeters (2005), in yet another case study of a Dutch chemical manu-
facturer, found that through the temporary transition of employees from business units to
the corporate incubator, employees learn new working methods they can subsequently
put to use in the business units.

10
3.1.2 Embedding the corporate incubator in the organization
The organizational structure of a corporate incubator is largely dependent on the objec-
tives of the parent company. A qualitative study by O’Connor and DeMartino (2006)
involving 12 companies found that mainly two configurations are found in practice. On
the one hand, there are corporate incubators located outside the business units with the
purpose to explore new knowledge. On the other hand, there are incubators located within
the business units but managed separately and differently within the mainstream opera-
tions. The authors also observe that the organizational structure is anything but static.
Over time, the structure gradually changes, approaching the parent company’s objectives.
In a later study, Robeson and O’Connor (2007) arrive at the proposition that firms that
moderately coupled their incubator and their business units were more successful than
firms that coupled their incubator and their business units either very loosely or very
tightly. Therefore, the relationship has an inverted u-shaped form.
In agreement with O’Connor and DeMartino (2006), Vanhaverbeke and Peeters (2005)
observed in their single case study that companies tend to set up corporate incubators
independently when they intend to develop new knowledge and technologies. Uit-
tenbogaard et al. (2005) also support this line of argumentation. However, the authors add
that despite their high autonomy, incubators still require top management support, and
moreover a budget to pursue different innovation opportunities. Kim et al. (2012) observe
the need for autonomy due to an organizational misfit. They state that ventures require
different organizational arrangements, such as an organization’s culture and processes,
than their corporate parents. Euchner and Ganguly (2014), who studied a US-based tire
producer, also agree with this observation. They believe that an independent entity has a
greater ability to escape the orthodoxies of the existing company and yet would be able
to borrow key assets of the company as necessary.
Should the corporate incubator in particular pursue the exploitation of existing
knowledge, it would be worth seeking a very close collaboration between the incubator
and business units, according to the research findings by Chesbrough and Socolof (2000).
The authors studied a multinational telecommunications equipment company and con-
cluded that a high degree of integration can address the business unit’s needs in a more
targeted fashion while avoiding the risk of unintended cannibalization of existing prod-
ucts and technologies. Moreover, the business unit could be informed of interesting de-
velopments early in the process, which would allow the unit to consider them in future

11
planning. Ford et al. (2012) also observed a similar approach in their study of a consumer
electronics firm. In an initial step, the company did not succeed to integrate technology
developed by the incubator into the business unit because the alignment between the tech-
nology and the current operations of the business unit was non-existent. However, fol-
lowing a stronger integration of incubator and business unit, the alignment could be in-
creased (Zedtwitz et al., 2004).
3.1.3 Support of the corporate incubator by the parent company
Particularly during the initial stages, corporate incubators are often dependent on re-
sources from the parent company. Various scientific studies have concluded that the sup-
port services of the parent company focus mainly on support through top-management
commitment and support through financial resources (e.g., Uittenbogaard et al., 2005;
Maine, 2008; Ford et al., 2010).
A vast body of scientific evidence suggests that a high commitment of top management
is a major success factor for corporate incubation (e.g., O'Connor and Ayers, 2005).
Among other findings, this was highlighted by Maine (2008), who observed that due to a
high-level steering committee, the incubator’s acceptance in the organization increased.
These findings are also corroborated by Robeson and O’Connor (2007), who investigated
12 large US-based firms with multicase analysis methods and drafted several proposi-
tions. In their conclusion, the authors point out that firms that are successful at developing
corporate innovation show a high level of senior leadership involvement.
In regard to the acquisition of external knowledge but also the internal promotion and
further development of innovations, corporate incubators are dependent on financial re-
sources. In a case study of a corporate incubator of a Netherlands-based technology com-
pany, Ford et al. (2010) report that at its launch, the parent company provided the incu-
bator with a fund of five million Euros to support and develop the ventures. The authors
add that as the number of ventures housed in the incubator increased, the parent company
increased the funding for the incubator, which ultimately reached 20 million Euros. Thus,
to a large extent, financial means are used to acquire minority interests in ventures.
3.2 Steering by the corporate incubator
The corporate incubator is responsible for the incubation process. On the one hand, the
incubator is responsible for the definition and implementation of the process. On the other

12
hand, however, he must also involve the participating organizational units of the parent
company and coordinate their participation (Becker and Gassmann, 2006b). In this func-
tion, the incubator acts as an advisor for the ventures but also as a knowledge broker
between the ventures and the business units of the parent company (Branstad, 2010).
3.2.1 Management and structure of the corporate incubator
The management of a corporate incubator is an essential criterion for its success. For this
reason, different authors in the scientific literature have already placed much emphasis
on management by conducting various studies on the topic (e.g., Allen and McCluskey,
1990; Branstad, 2010). Thus, most of the reviewed work focuses on the composition of
the management board. Moreover, a few studies put compensation of the management
board front and center (Robeson and O’Connor, 2007; Ferrary, 2008).
In the context of a multicase analysis of 12 large US-based firms, Robeson and O’Connor
(2007) investigated the governance mechanisms of different innovation units (e.g., incu-
bator, corporate venturing unit). As a result of this work, the authors discuss, among other
things, the composition of the management board. They conclude that the management
board of a corporate incubator should consist of members of the incubator as well as
individuals outside of the incubator, such as the business units. Moreover, the authors
argue that the board should be characterized by functional diversity among the board
members, where the board size should be between five and eight persons, and that the
management style should be collaborative and not ‘command and control’. With respect
to the staffing of the operative management, Chesbrough and Socolof (2000) found in
their analysis that it is very difficult for companies to find suitable management personnel
for the incubator on the free market. Instead, it was shown that long-serving employees
of the company with an entrepreneurial background are the best fit. In their research,
Grimaldi and Grandi (2005) observed that the operative management thus plays an ex-
tremely important role. On the one hand it must promote the development of external
contacts, and on the other hand it must assure the support of the ventures via mentoring
and networking. In this context, however, Zedtwitz and Grimaldi (2006) found in their
qualitative analysis of 15 incubators that the management quality of corporate incubators
is significantly higher than that of (independent) business incubators.
In addition to the composition of the management board, the compensation of the incu-
bator management is also a relevant research topic (e.g., Ferrary, 2008). According to

13
Chesbrough and Socolof (2000), the compensation can fall within an area of tension span-
ning from a fixed compensation, as is common for companies, to a very variable com-
pensation, as practiced by independent incubators and venture capital companies. Based
on a case study of a multinational telecommunications equipment company, the authors
conclude that the compensation should ultimately follow flexible compensation mecha-
nisms. This allows incubator management to create a performance-based incentive sys-
tem. However, the authors note that different compensation mechanisms between corpo-
rate incubator and the remaining business units could lead to tensions between the units.
3.2.2 Mechanisms and processes to develop ventures
For the successful development of ventures, the literature recommends a systematic de-
velopment approach and appropriate support by incubator staff. In addition to ensuring
certain quality standards, a systematic approach should be used to standardize develop-
ment so that a higher number of ventures can receive a certain quality of support (Becker
and Gassmann, 2006a; Ford et al., 2010). However, the support of the incubator staff is
essential for the company to be able to respond to the individual needs of the ventures as
part of their individual development process (Kohler, 2016).
The literature distinguishes different support mechanisms for the development of ven-
tures. In a case study, Maine (2008) observed how the development and provision of
resources could be controlled and manipulated by setting financial milestones in the areas
of target sales, profit, and capital expenditures, and nonfinancial milestones in the areas
of resource building, internal execution, customer acceptance of technical performance,
and external perception. Ford et al. (2010) also mention the necessity to control a ven-
ture’s progress. In their case study, the incubator successfully applied monitoring and
controlling processes in a venture capital setting. In addition to a performance-based per-
formance review, a structured approach also enables comparability between different
ventures and the standardization of development (Ford et al., 2010).
In the course of a longitudinal case study, Branstad and Saetre (2016) found that high
levels of involvement by incubator staff could yield substantial benefits for their ventures.
Consequently, the incubator’s ability to provide business assistance is not only about hav-
ing the right skills but also about bringing these skills and assets into the tenant compa-
nies. The study by Barbero et al. (2014) shows that many corporate incubators already

14
place much emphasis on an appropriate supervisory relationship. For example, the au-
thors established that corporate incubators host fewer ventures than other types of incu-
bators, enabling them to focus resources in-depth rather than spreading them thinly across
a large number of ventures. Additionally, Brandstad (2010) found that the staff of the
incubator regularly acts as knowledge brokers between ventures and business units.
Becker and Gassmann (2006b) argue that through the informal communication of
knowledge, formal hierarchical communication paths are reduced, and cultural or linguis-
tic barriers are dismantled.
3.2.3 Services provided by the corporate incubator
Like business incubators, corporate incubators offer different support services for the de-
velopment of the ventures. Thus, the provision of management, product and market
knowledge is particularly relevant for ventures (Branstad, 2010). Moreover, the incubator
enables access to venture capital and to strategic partners (Allen and McCluskey, 1990;
Grimaldi and Grandi, 2005).
The provision of specific management, product and market knowledge often involves a
crucial unique selling point of corporate incubators compared to business incubators.
Through their parent company and contact with business units, corporate incubators can
obtain very specific knowledge and make it accessible to ventures. Ohe et al. (1992) in-
vestigated 38 ventures of 18 large Japanese manufacturing companies and found that
management support and product knowledge from business units are crucial for the suc-
cessful performance of ventures. The study also indicates that the success of the ventures
correlates with the increase of provided marketing know-how. In a longitudinal case study
involving a Norway-based incubator, Branstad (2010) concludes that there are clear dif-
ferences regarding provided knowledge. For example, ventures rely on different forms of
knowledge. Thus, the author distinguishes between entrepreneurial and organizational
knowledge, which should be provided by the management of the incubator, as well as
market and technological knowledge, which should be provided by the business units of
the parent company. The type of knowledge required by ventures should be determined
by the incubator management while also taking their development into account.
In addition to management, product and market knowledge, the corporate incubator can
secure access to venture capital in two ways. Should there be an indication that the venture
could become strategically relevant for the parent company or one of their business units,

15
the venture can be supported financially by the parent company or the business unit. In
this vein, Block et al. (2017) and Hausberg and Korreck (2017) argue that established
companies are increasingly opening up and investing in strategic relevant startups with
the help of corporate incubators. If the venture does not develop strategic potential for the
parent company or one of its business units, contact with external investors could be ini-
tiated. Grimaldi and Grandi (2005) found that corporate incubators fare significantly bet-
ter in the procurement and brokering of financial resources than do public incubators.
Surveying 15 founders of corporate spin-offs, Neck et al. (2004) found that the informal
network between corporate incubators, ventures and strategic partners was of major im-
portance for 67% of the interviewed founders. Another study by Grimaldi and Grandi
(2005) underlines that corporate incubators in particular can point to a strong network of
strategic partners which ultimately ventures can access as well. The network allows ven-
tures to easily and quickly access competencies that are not available in-house and that
are important for their business (Kambil et al., 2000). These relations enable them to
speed up their business development cycles. The findings by Grimaldi and Grandi (2005)
were also corroborated in a case study by Hughes (2007). A vast network of strategic
partners that can provide key services to incubating companies, as well as access to
knowledge, expertise and even patents, is the foundation of the corporate incubator stud-
ied.
3.3 Involvement of the business units
Business units are mainly responsible for the development, production and marketing of
technologies. As part of the parent company's strategic goals, it is often the business units
that are expected to participate in the activities of the corporate incubator in order to fur-
ther develop their products or create new innovations (Weiblein and Chesbrough, 2015).
To benefit from the activities of the incubator, the business units must be actively in-
volved in the knowledge transfer (Gassmann and Becker, 2006; Kohler, 2016). In addi-
tion, the units are required the support the ventures in order to ensure a trusting relation-
ship via a bidirectional exchange of resources (Branstad, 2010).
3.3.1 Participation of the business units in the incubation process
The scientific literature agrees that there should be a regular knowledge exchange be-

16
tween business units and the corporate incubator. Maine (2008) argues that an early in-
volvement and a regular exchange are required to prevent rejections of new approaches
by the business units. Moreover, Kim et al. (2012) argue that business units become sen-
sitized to relevant developments and their possible synergies. These findings are sup-
ported by Euchner and Ganguly (2014), who exhaustively studied the innovation activi-
ties of a US-based tire producer. In the literature, mechanisms of coordination are identi-
fied as involvement through the management board and involvement through contact per-
sons.
Based on a multiple case study with nine organizations from the US, Chen and Kannan-
Narasimhan (2015) observed that the majority of the organizations in their sample estab-
lished committees or boards consisting of executives from business units to supervise or
advise new venture activities. The authors add that the degree of integration, however,
varies greatly. Some advisory boards are deeply involved in the details of the incubation
process, which often leads to problems as well. First, business unit executives often have
extensive experience managing large organizational entities. However, this leads to a
strong bottom-line mentality, and they lack the necessary knowledge and skills to
properly guide and manage early stage ventures. Second, when the interests of the advi-
sory board members are tied to the interests of established business units, the board mem-
bers are likely to be biased against new ventures, especially if these ventures hurt the
interests of the business units.
More promising is the involvement of the business unit through contact persons. In addi-
tion to the establishment of a managing board, Becker and Gassmann (2006b) identified
contact persons as another coordination mechanism. Some of the companies studied by
the authors succeed in ensuring regular coordination through explicitly defined contact
persons at the business unit. The contact persons all take part in a predefined process of
advice to develop selected ventures with relations to their business units. If the related
venture needs to further tap the business unit’s information or networks, the defined com-
munication channels help to reduce the venture’s search time and ensure the business
unit’s commitment and support. These interfaces also support the exit of ‘graduated’ ven-
tures after a successful incubation process.

17
3.3.2 Provision of resources by the business units
The provision of resources allows business units to demonstrate their commitment to ven-
tures of their choice. Generally, participation includes the provision of specialized
knowledge or the provision of financial resources. With the provision of resources, the
business units share the risks and rewards associated with these ventures (Gassmann and
Becker, 2006). The risk mainly results from the uncertainty that the supported ventures
will be further developed (Ford, 2010). This is especially true when business units invest
in early stage ventures in which the directions and outcomes of the projects are highly
uncertain. Under such situations, business units are motivated to work closely with the
corporate incubator and the ventures to minimize the associated risk (Chen and Kannan-
Narasimhan, 2015).
Often, business units support the corporate incubator and the ventures through the provi-
sion of special knowledge. In a quantitative study of 80 incubators, Barbero et al. (2014)
found that business units can support the incubator’s ventures with access to leading tech-
nology, commercial market knowledge and specialized managerial knowledge. Becker
and Gassmann (2006b) draw similar conclusions. In a qualitative study of 25 cases from
Europe and the US, the authors found that ventures can gain access to a large pool of
internal knowledge on business development, markets, customers, suppliers, technology,
and external partners via the business units. According to Kim et al. (2012), ventures of
the corporate incubator with access to the knowledge of the business units have a com-
petitive advantage over independent ventures. However, it must be remembered that the
transfer of knowledge is in general bidirectional. The close cooperation with the venture
also allows the business unit to acquire critical knowledge about, for example, new tech-
nologies.
In addition to immaterial resources, business units often support the incubator and the
ventures with financial resources. For a corporate incubator, financial resources are of
essential importance to acquiring minority equity stakes of ventures and to expediting
their further development (Becker and Gassmann, 2006a, 2006b). In addition to the cen-
tral provision by the parent company, Maine (2008), in his case study of a large German
chemical group, observed that in practice there are mechanisms in place allowing finan-
cial means to be made available through the business units. In such a case, business units
choose ventures that are relevant to them, supporting them with specialized knowledge
and capital.

18
3.4 Process of knowledge transfer and venture development
As already mentioned, the bidirectional transfer of knowledge is one of the main differ-
entiating features between corporate incubators and other forms of business incubators
(Gassmann and Becker, 2006; Hausberg and Korreck, 2017). After having discussed the
support activities of the involved organizational units in the previous sections, the process
of knowledge transfer and venture development will be described below. In this setting
the corporate incubator acts as an organizational link and knowledge broker between the
business units and the ventures. To achieve the strategic objectives of the parent company,
the organizational requirements for a continuous knowledge transfer have to been estab-
lished (Uittenbogaard et al., 2005). Therefore, as shown in Figure 3, selected ventures
must first be integrated into the governance structure of the incubator before they can be
spun off again following a successful incubation process (van Burg et al., 2012; Chen and
Kannan-Narasimhan, 2015).
[Fig. 3: Process of knowledge transfer and venture development]
Gassmann and Becker (2006), in a scientific study, examined the transfer of knowledge
between the corporate incubator, the business units, and the ventures as well as the inter-
faces among the different entities. Following their contribution, we divide the following
section into three phases: During venture selection, ventures will be selected, and con-
tractual agreements will be concluded (Ginsberg and Hay, 1994; Chen and Kannan-Nara-
simhan, 2015). The following venture development phase is characterized by the integra-
tion of the ventures into the governance structure of the corporate incubator, supporting
venture development and establishing links between ventures and business units
(Gassmann and Becker, 2006). During the venture spin-off phase, ventures are spun off
from the corporate incubator’s governance and are organizationally restructured (van
Burg et al., 2012).
3.4.1 Acquisition of general knowledge through venture selection
The selection of suitable ventures is a significant aspect of realizing the strategic goals of
the parent company. However, selection turns out to be very challenging because, on the

19
one hand, the potential of the ventures must be assessed at a very early stage while on the
other hand, the fit in accordance with the objectives of the parent company should be
assured simultaneously (Pauwels et al., 2016). After the selection of promising ventures,
the incubator must negotiate with the ventures regarding the support provided and the
associated compensation (Becker and Gassmann, 2006b). Thus, the following sections
specifically discuss the aspects of the search, the selection and the negotiation with new
ventures.
Kim et al. (2012) found that ventures arrived in two ways. On the one hand, employees
of the corporate incubator were actively seeking suitable ventures in conversation with
entrepreneurs, venture capitalists, and engineers and managers. Additionally, the studied
companies received information regarding exciting ventures from the business units as
well as the R&D department. In the case study by Ford et al. (2010), the incubator in
particular supports internal ventures. Venture sources are hereby designed very similarly
to those described by Kim et al. (2012). In the study by Ford et al. (2010), the internal
ventures are specifically identified in conversation with R&D departments. Additionally,
many opportunities arise from informal conversations and a strong network within the
company. While searching for new ventures, the corporate incubator acquires much
knowledge of new market trends and new technologies. This knowledge helps the incu-
bator assess new ventures but can also be vital for the business units (O'Connor and De-
Martino, 2006). To guarantee the exchange of acquired knowledge between incubator and
business units, business units should be involved in the search for new ventures (Ford,
2010; Chen and Kannan-Narasimhan, 2015).
A study comprising 38 corporate ventures of 18 large Japanese manufacturing companies
led Ohe et al. (1992) to conclude that new ventures are associated with many uncertainties
and that the ‘common sense’ knowledge that each individual will apply in dealing with
these uncertainties is less common than is often anticipated. For this reason, the authors
recommend that incubators place much emphasis on the definition of suitable and com-
prehensible selection criteria. This advice is also given by Chesbrough (2003), who based
his study on 35 spin-offs by a large American technology company, arguing that a selec-
tion process must be implemented to exercise strong selection pressures against those
ventures that yield unpromising results. The results reported by Ford et al. (2010) high-
light a Netherlands-based technology company that applies strict selection criteria such
as (1) the protectability of the intellectual property governing the technology; (2) the po-
tential of the technology to create a $100 million market; (3) the potential disruptiveness

20
of the technology to an industry; (4) the strategic alignment of the technology with the
parent company’s long-term corporate strategy; and (5) a motivated and capable team.
The significance of the strategic fit with the goals of the parent company is also discussed
by Becker and Gassmann (2006b), who conclude that the fit with the corporate strategy
is of the utmost importance for corporate incubators. The study by Branstad (2010) pro-
vides an additional viewpoint to the work already discussed. Branstad (2010) observed
that one of the criteria for selecting new ventures was that the observed company had
something to offer to the ventures. The company herewith explicitly considered the aspect
of mutual creation of value.
After the selection of a venture and before the final acceptance, the venture and the cor-
porate incubator negotiate the aspects of their potential cooperation. Becker and
Gassmann (2006b) explain in this context that compensation for support services often
occurs through medium equity stakes or through payment for services. These legal ar-
rangements also include the ventures’ potential length of tenancy in the incubator and the
kind of support they will receive, as well as the possible exits to aim at. Their explanation
is supported by Grimaldi and Grandi (2005), who studied different types of incubators
and found that compared to other types, corporate incubators have their services specifi-
cally paid through equity stakes in the ventures.
3.4.2 Acquisition of specific knowledge through venture development
Once a venture has been selected and integrated into the corporate incubator, it will be
supported as part of the development process (Allen and McCluskey, 1990; Becker and
Gassmann, 2006b). This support is coordinated by the corporate incubator and can be
carried out by the incubator solely or with the involvement of a business unit. If a business
unit considers a venture as promising, the involvement is especially recommended to en-
sure a direct knowledge transfer between the venture and the business unit, without the
corporate incubator as an intermediary (Branstad, 2010). In the following sections we will
discuss the phases involving the integration of new ventures, the development of the ven-
tures, and the completion of that development (see Figure 4).
[Fig. 4: Governance structures during venture development]

21
To ensure an appropriate transfer of knowledge, a corresponding governance structure is
needed. In his pioneering work on transaction cost economics, Williamson (1991) exam-
ines hybrid structures, in addition to market structures and hierarchical structures. Wil-
liamson concludes that hybrid structures are especially suitable in cases where transac-
tion-specific dependencies favor the integration of transactions into the organization,
while efficiency advantages point to market coordination. The pros and cons of different
governance structures can be determined by taking a closer look at the characteristics of
knowledge. The literature distinguishes between tactic knowledge and explicit
knowledge, where the difference between the two lies in their transferability. While ex-
plicit knowledge can be disclosed, coded, and transferred via communication, tactic
knowledge can, for the most part, only be disclosed through its specific application
(Grant, 1996; Fryges and Wright, 2014). Due to these circumstances, the transfer of tactic
knowledge proves to be tedious and risky (Kogut and Zander, 1992). The transmission of
tactic knowledge via market transactions is therefore not appropriate. Rather, a close col-
laboration and regular interaction between ventures and the business units of the estab-
lished business is needed (Chen and Kannan-Narasimhan, 2015). Therefore, hierarchical
or hybrid structures are recommended for the transfer of knowledge (Williamson, 1991).
One counterargument against hierarchical structures is the overbearing influence of the
business units over ventures (Vanhaverbeke and Peeters, 2005). Innovation is often hin-
dered by formal and standardized structures (Euchner and Ganguly, 2014). Moreover,
even hierarchical structures do not seem to optimize knowledge flow, since it must often
be transferred across and beyond various hierarchy levels (Trompenaars and Woolliams,
2002). Interdisciplinary developments among various departments are stifled by a chain
of command that must be followed. Furthermore, it should be noted that promoting inno-
vation is still a risk-prone activity (Ford et al., 2012). Due to the development of innova-
tion within an entity that is detached from the established company, the risks can be grad-
ually minimized through the progressive development of ideas (Powell, 2010). After mar-
ket and hierarchical structures prove unsuitable, hybrid structures present the governance
structure of choice for the transfer of knowledge (Gassmann and Becker, 2006; Chen and
Kannan-Narasimhan, 2015). Since corporate incubators are established as a hybrid struc-
ture, new ventures must be integrated (Becker and Gassmann, 2006b). Depending on their
origin, ventures go through integration processes that are in part significantly different
(Chesbrough and Brunswicker, 2014). While internal ventures must be transferred from

22
their existing hierarchical structure and subsequently integrated into the corporate incu-
bator (Trompenaars and Woolliams, 2002), external ventures must be transferred from
their market structure and integrated into the corporate incubator (Becker and Gassmann,
2006a). The objectives behind the integration are identical: With the choice of a hybrid
organizational structure, the established company should be enabled to better access the
ventures’ knowledge to make it accessible for its business units (Becker and Gassmann,
2006b).
Following Becker and Gassmann (2006b), the development of ventures is one of the most
important and longest phases in the incubation process. The managers and the staff of the
incubator support the ventures by providing management assistance via an extensive flow
of resources, of which knowledge is the most important. Hence, knowledge flow is bidi-
rectional, and the involved employees of the incubator or the business units also acquire
knowledge from the ventures (Fryges and Wright, 2014). One of the greatest challenges
surrounding knowledge transfer is the transfer of tactic knowledge (Grant, 1996). While
the respective organizational conditions were created during the integration of new ven-
tures, the transfer of knowledge must be supported with appropriate measures. The most
common measures are personal exchange and active collaboration between business units
and ventures (Becker and Gassmann, 2006b; Gassmann and Becker, 2006; van Burg et
al., 2012; Ahmad, 2014). This exchange can be assured with regular meetings or work-
shops, for example, where the current developmental progress of ventures is discussed
(Branstad, 2010). Temporary staff postings to support ventures are also an appropriate
opportunity to transfer knowledge through active collaboration (Branstad and Saetre,
2016). Another challenge manifests itself in the absorption and usage of the knowledge
gained through transfer. In this context, Cohen and Levinthal (1990) refer to absorptive
capacity, describing the capacity of organizations to recognize new knowledge and com-
bine it with existing knowledge with the goal of further expanding the organization’s
knowledge base. The authors conclude that to a certain extent, the absorptive capacity is
dependent on the similarity of two companies. Hence, this finding underlines the argu-
ment that ventures that better address the core business of the established company are
more suitable for collaboration with business units than ventures targeting adjacent busi-
ness segments (Chen and Kannan-Narasimhan, 2015).
The timing of the completion of the development is highly relevant. Becker and
Gassmann (2006b) found that many corporate incubators have specific exit criteria. De-
pending on the incubator, these criteria may depend on achieved milestones or

23
unachieved objectives. O'Connor and DeMartino (2006) argue that a venture is ready for
spin-off when the first revenues are generated and the dependency from support services
provided by the corporate incubator decreases. In addition to achieving defined goals,
however, the end of a predefined incubation period or limited space in the incubator itself
may be a reason for the spin-off. However, it could be considered that if the spin-off
occurs too early, many uncertainties regarding the market and technology remain unre-
solved and the strategic value of the venture, including the best spin-off option, cannot be
assessed in definitive terms (Chen and Kannan-Narasimhan, 2015). In contrast, if the
spin-off occurs too late, the established company could miss its opportunity to establish
strategically relevant ventures as a first mover in the market (van Burg et al., 2012).
3.4.3 Venture spin-off after knowledge acquisition
After deciding on the completion of the development of a venture, the corporate incubator
must decide on the future development of the venture, taking into account the objectives
of both parent company and venture (O'Connor and DeMartino, 2006). After deciding on
the spin-off, it must be prepared and executed accordingly (van Burg et al., 2012). In the
following section, therefore, the phases involving the preparation and execution of the
spin-off are described by taking the scientific literature into account.
After deciding on the timing of the spin-off, the best spin-off option should be chosen in
accordance with the venture (see Figure 4). On the one hand, the venture can be com-
pletely outsourced from the corporate boundaries (Fryges and Wright, 2014). However,
it can also be integrated into an existing business unit or continued as an independent
organizational unit within the corporate boundaries. Ford (2010) and O'Connor and De-
Martino (2006) report that ventures with strategic value to the parent company should be
integrated into one of the business units of the company, while those without any or with
little strategic fit must either remain independent organizational units within the bounda-
ries of the parent company or operate as an independent company (Powell, 2010; Weiblen
and Chesbrough, 2015). O'Connor and DeMartino argue that while some ventures may
be strategically relevant for the parent company, they must not be aligned with the current
activities of the business units. These ventures may fit within the strategic intent of the
parent company but may lead to the commercialization of projects that do not fit nicely
into existing operating units and that challenge current business models. The assessment

24
of the strategic value and the appropriate organizational structure is thus extremely rele-
vant because the choice of an inappropriate structure can greatly hinder the further busi-
ness development of the ventures (Trompenaars and Woolliams, 2002). Christensen et al.
(2016) argue, for example, that ventures transferred into an existing business unit without
a strategic fit cause massive conflicts within the business units. In addition, Powell
(2010), in an exploratory case study, found that the integration of ventures can also have
a significant impact on the established business and involves administrative costs. A con-
glomerate of independent ventures may go hand in hand with high flexibility but also
entail high administrative costs. The CEO of the observed company stated that the com-
plex structure resulted in operational inefficiencies, reduced stock market liquidity, and
reduced coverage by analysts. Their spin-off strategy produced a structure that was com-
plex and expensive to maintain in terms of both managerial attention and money. The
author argues that unrelated units should have been consequently sold off–even if they
were successful. Related units that proved successful should have been integrated into
existing business units. Whether related or not, unsuccessful units should have been
promptly disposed of as profitably as possible by selling them to an acquirer. The strategy
of permanently holding majority stakes in its ventures led the company to become a hold-
ing company in spite of senior management’s attempts to distinguish the structure pro-
duced by the spin-off strategy from that of a holding company.
Performing a spin-off is very complex. Ford (2010) reports that this is particularly the
case if the venture is integrated into an existing business unit. Business units have been
found to resist quite fiercely the introduction of new technologies not invented within
their purview. Resistance arises especially when the new venture represents a threat to
established positions. In addition, managing the transition into the business unit may also
require the removal of some of the venture team leaders when they no longer have the
competences required for operating the venture within the business unit. To overcome
resistance and to increase the success of the spin-off, van Burg et al. (2012) conducted an
empirical study of six corporate venture transition processes and derived design principles
for a successful venture transition. The authors discovered that, on the one hand, the ven-
ture transition should be prepared by assembling a dedicated transition team, conducting
a readiness and capability assessment, and developing a transition plan, serving to en-
hance the integration process and avoid integration problems afterwards. On the other
hand, the corporate organization and the corporate venture should identify and empower
strong champions in the established organization who should be active in all phases of

25
the venture transition process. The receiving business unit should maintain a degree of
autonomy and flexibility regarding the venture in the post transition phase by using direct
reporting lines that enable quick decision making.
4 Discussion
The framework presented in the previous chapter offers a comprehensive overview of the
scientific field of corporate incubation. Although some elements of the framework have
been discussed extensively in the scientific literature, other elements remain largely un-
explored. The discrepancy between the elements gives rise to open questions of scientific
inquiry, which are discussed below. To contribute to the advancement of the scientific
field, these questions demand both conceptual and empirical answers.
4.1 Integration into the organization
Corporate incubation is not a ready solution. Rather, it is a concept that lays out crude
guardrails for the realization of innovation in established companies. The concrete imple-
mentation is a highly individualized matter and adheres to the objectives of the parent
company (Becker and Gassmann, 2006b; O'Connor and DeMartino, 2006). On top of it,
conflicts and political interests within the established company add to the complexity of
organizational adjustments (Evald and Bager, 2008). Taking into account the high failure
rates of corporate incubators (Becker and Gassmann, 2006a, 2006b), the following ques-
tions should be considered for future research:
(1) What are the organizational conditions an established company should exhibit to
ensure the success of a corporate incubator?
(2) How can the conflicts and political interests that go hand in hand with the imple-
mentation of corporate incubators be addressed?
A major decision with the implementation of corporate incubation is the degree of auton-
omy on the side of the incubator (Ginsberg and Hay, 1994; Evald and Bager, 2008). The
literature agrees that a corporate incubator can be organized along a continuum from low
to high autonomy (see Figure 5). A tight linkage of the corporate incubator can ensure an
intense transfer of knowledge between the incubator, the ventures and the business units
of the established company, on the one hand (Gassmann and Becker, 2006; Chen and
Kannan-Narasimhan, 2015). On the other hand, the established company can exert direct

26
influence on the operation of the incubator (Kohler, 2016). Due to a tight collaboration
with the entities of the established company, the integration of ventures into business
units will meet greater acceptance (Zedtwitz et al., 2004). In contrast, high autonomy
complicates the transfer of knowledge with the established company and its business units
(Chen and Kannan-Narasimhan, 2015). Due to the distance to the business units, votes
during the incubation process are impeded. During the integration process of ventures, a
lower acceptance should be expected (van Burg et al., 2012).
[Fig. 5: Corporate incubator as knowledge broker between business units and ventures]
The mentioned positions result in a dilemma for established companies: For one part, they
can pursue a tight linkage with the corporate incubator, ensuring an intense transfer of
knowledge and increasing the acceptance of ventures by the business units. It must be
assumed, however, that the incubator’s operations are directly and indirectly impacted by
the tight linkage. It is expected that solutions that are developed during the incubation
will be less innovative and more aligned with the existing core business. On the other
hand, an incubator can be structured in a substantially autonomous way. This approach
offers great freedoms and can promote innovation detached from the existing business
model – including innovation that attacks the existing core business (Gassmann and
Becker, 2006; Euchner and Ganguly, 2014; Chen and Kannan-Narasimhan, 2015). The
disadvantage, however, is that the distance to the established company makes an intense
transfer of knowledge more difficult and forces ventures struggle with less acceptance
(Zedtwitz et al., 2004). Considering depressed knowledge transfer and less acceptance
within the established company, questioning the value added by the corporate incubator
is legitimate. The following questions should further guide future research:
(3) How can a best-possible balance be ensured between innovation (high autonomy)
and acceptance (low autonomy)?
(4) How can good knowledge transfer and high acceptance be ensured in spite of high
autonomy?
(5) How can radical innovation irrespective of direct and indirect influence occur in
spite of low autonomy?
(6) Do organizational structures exist that would allow an established company to
circumvent this dilemma?

27
The business units of established companies usually operate as cost centers. This means
that the entities are managed in a strongly cost-focused manner and must achieve defined
goals by drawing from an annual budget that is available to them (Becker and Gassmann,
2006a). This controlling of business units often reflects negatively on cooperation with
the corporate incubator and the ventures. Thus far, the scientific literature has not engaged
in the discourse on how established business units can be motivated to participate in cor-
porate incubation. The business units often face the problem that by offering support ser-
vices, e.g., marketing activities or production capacities, the corporate incubator or ven-
ture should be charged the cost. Therefore, the established company must create appro-
priate mechanisms that allow these costs to be balanced. With the increasing autonomy
of the incubator, however, the disinterest of business units seems to mount. Therefore,
future research should focus on the following question:
(7) How can the business units be motivated to actively collaborate with the corporate
incubator?
4.2 Needs of ventures
The basic support processes for ventures are well-documented in the scientific literature
regarding business incubators (e.g., Markham et al., 2005). The needs of ventures in the
context of corporate incubators, however, require a more differentiated approach. Internal
ventures often have no alternative for the development of their ideas other than the cor-
porate incubator (Neck et al., 2004; Zedtwitz et al., 2004). From the perspective of exter-
nal ventures, the corporate incubator is in competition with business incubators and other
supporters, e.g., business angels or venture capitalists (Carayannis and Zedtwitz, 2005).
The literature on corporate incubation, however, presumes that there is an abundant pool
of eager external ventures. The potential ventures pursue their own interests and represent
those interests in negotiations with corporate incubators (Zedtwitz and Grimaldi, 2006).
Potential ventures with promising ideas can display particularly marked self-confidence
due to the competitive nature of the situation.
Consequently, established companies must clearly emphasize their advantages in the
competition for the best ventures. Ventures with complementary ideas can profit from the
resources of an established company (e.g., Becker and Gassmann, 2006b; Maine, 2008;
Kohler, 2016). At the same time, ventures must worry that the established company will
consider acquiring and exploiting critical knowledge, which in most cases would rob the

28
venture of its right to exist (Alvarez and Barney, 2001). Moreover, due to its capital stake,
the established company can control more or less the venture’s future direction. Espe-
cially in cases where the interests of both parties diverge, this proves to be critical. Po-
tential ventures often view corporate incubators with skepticism because of these men-
tioned aspects. Hence, future research should address the following questions:
(8) What are the primary objectives pursued by external ventures in collaborating
with a corporate incubator?
(9) What are the internal and external factors swaying external ventures to collaborate
with a corporate incubator?
(10) How do the needs of internal and external ventures differ during collaboration
with a corporate incubator?
(11) How can the corporate incubators align interests between the parent company and
the ventures?
4.3 Spinning off the ventures
The spin-off and tracking of ventures presents other critical aspects. Following a success-
ful incubation, established companies have the option to integrate the ventures into one
of their business units or to continue operating them as independent entities (Powell,
2010; Chen and Kannan-Narasimhan, 2015). Should a venture remain an independent
entity, an additional question is whether it should remain within the company network or
be operated outside the boundaries of the company.
In a situation where ventures are increasingly operated as independent entities within the
boundaries of the established company, they will have to react with a holding structure
(Ford et al., 2010; Christensen et al., 2016). Although this type of organization ensures
the high flexibility of individual entities, the established company must define interfaces
per entity, which will increase transaction costs. Moreover, the operative management of
a holding structure comes with high administrative and financial burdens (Powell, 2010).
Hence, the following questions should be considered in future research:
(12) In what specific instances do established companies operate ventures as independ-
ent entities within corporate boundaries?
(13) What circumstances promote the future spin-off or integration of ventures?

29
5 Conclusion
This work aimed to systematically analyze the scientific literature regarding the topic of
corporate incubators. Based on the findings, a comprehensive framework was deduced,
categorizing corporate incubation in a broader context and explicitly examining
knowledge transfer. It became clear that some elements of the framework were exten-
sively discussed in the scientific literature, whereas other elements still require more thor-
ough examination. Subsequently, the discussion offered and debated open questions of
scientific inquiry.
5.1 Implications
The present work has implications for the scientific field and for practice. Attention is
drawn to underrepresented areas of research that should be the focus of future efforts. As
can be derived from the analysis of the identified literature (see Table 1), most of the
literature on corporate incubators is based on qualitative methods (Cunningham et al.,
2017). In addition to a more intensive consideration of corporate incubation as a research
field as a whole, an increased use of quantitative methods should be used in further re-
search to verify specific findings.
Moreover, the present work emphasizes that corporate incubators represent a sub-cate-
gory of business incubators, but nevertheless, significant differences exist between the
two disciplines (Uittenbogaard et al., 2005; Evald and Bager, 2008; Pauwels et al., 2016).
A major driver of the complexity of the corporate incubator is its embeddedness in the
organizational structure of the established company and the knowledge transfer among
the business units (Gassmann and Becker, 2006). As could be demonstrated with this
work, these questions in particular should become the focus of future analysis. Moreover,
closer links with other lines of research should be intensified. Many well-researched the-
ories, such as the knowledge-based view, transaction cost economics, organizational
learning and interfirm relationships may provide important insights to advance the re-
search field of corporate incubators.
Important findings can also be deduced for practice. The basic prerequisite for the suc-
cessful operation of a corporate incubator is awareness about the objective of the parent
company. If this objective is defined, the strategy and structure of the corporate incubator
should be consistently derived from it (Becker and Gassmann, 2006a). It is therefore im-
portant to balance the embedding of the incubator under consideration of the associated

30
pros and cons. Moreover, established companies should pay increased attention to the
needs of potential ventures. This applies particularly to collaborations with external ven-
tures because in this case, corporate incubators find themselves competing with business
incubators and other sponsors, such as venture capitalists and business angels (Carayannis
and Zedtwitz, 2005).
5.2 Limitations
The limitations of the present work result from the collection of the relevant literature.
While it was done systematically, comprehensibly, and transparently, some restrictions
have been placed in the process. The search is based on only three databases and was
limited to journals in the English language in the areas of business, management, and
accounting. This was, however, a calculated measure to ensure the quality of content. A
second limitation was the search query. An attempt was made to include an ideally large
number of contributions, but due to the inconsistent terminology in the scientific litera-
ture, it was not possible to capture every relevant contribution in the query output. Finally,
it should be mentioned that the contributions were subject to content analysis by the au-
thor, which could have led to a subjective bias in the selection of contributions. To coun-
teract this effect, the analysis process was standardized using a data extraction sheet
(Tranfield et al., 2003). Despite these limitations, the author is confident that the present
work and the deduced framework present a good starting point to gain a deeper under-
standing of corporate incubators and the questions that remain open. The paper can thus
contribute a valuable impulse for the further development of the scientific field.

31
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- 37 -
Appendix 1: Research methods and samples of the analyzed literature
Author(s)
Research method
Sample
Region
Aaboen (2009)
Qualitative (Multiple
case study)
Six incubators
Sweden
Ahmad (2014)
Qualitative (Ethno-
graphic study)
Two incubators (one university campus incuba-
tor, one community enterprise center)
Ireland
Allen and
McCluskey
(1990)
Descriptive (Survey)
127 incubators
US
Barbero et al.
(2012)
Quantitative (Analysis
of variance)
70 incubators (33 basic research incubators, 17
university incubators, 11 economic develop-
ment incubators, nine private incubators)
Spain
Barbero et al.
(2014)
Quantitative (Chi-square
test)
80 incubators (37 basic research incubators, 21
university incubators, 13 economic develop-
ment incubators, nine private incubators)
Spain
Becker and
Gassmann
(2006a)
Qualitative (Case study,
analysis of archival
data, survey)
25 large technology-intensive corporations with
corporate incubators; quantitative database of
950 European incubators; five researchers and
heads of technology transfer offices of two top
ten universities
Europe / US
Becker and
Gassmann
(2006b)
Descriptive (Survey);
Qualitative (Case
study)
77 incubator managers; 25 corporate incubators
Europe / US
Block et al. (2017)
Conceptual
N/A
N/A
Branstad (2010)
Qualitative (Case study)
One hybrid corporate incubator (Kongsberg Inno-
vation)
Norway
Branstad and Sae-
tre (2016)
Qualitative (Case study)
One hybrid corporate incubator (Kongsberg Inno-
vation); one venture project (Ballast Water
Treatment)
Norway
Carayannis and
Zedtwitz (2005)
Conceptual
N/A
N/A
Chen and Kannan-
Narasimhan
(2015)
Qualitative (Multiple
case study)
Nine organizations with venture units
US
Chesbrough (2003)
Qualitative (Analysis of
archival data, inter-
views)
35 spin-off organizations from the Xerox Corpo-
ration
US
Chesbrough and
Brunswicker
(2014)
Descriptive (Survey)
125 large firms with annual sales in excess of
$250 million
Europe / US
Chesbrough and
Socolof (2000)
Qualitative (Case study)
Two corporate research laboratories (Bell Labor-
atories, Lucent New Ventures Group)
US
Christensen et al.
(2016)
N/A
Nine companies undertaking business model in-
novation efforts
N/A

- 38 -
Author(s)
Research method
Sample
Region
Euchner and Gan-
guly (2014)
Conceptual
N/A
N/A
Ferrary (2008)
Qualitative (Case study)
One corporation (spin-off program and corporate
venture capital unit of France Telecom)
France
Ford et al. (2010)
Qualitative (Case study)
One corporate incubator (Technology Incubator
of Philips)
Netherlands
Ford et al. (2012)
Qualitative (Interviews
and focus group
workshops)
17 senior technology managers and commercial
lawyers
N/A
Fryges and Wright
(2014)
Conceptual
N/A
N/A
Ginsberg and Hay
(1994)
Conceptual
N/A
N/A
Grimaldi and
Grandi (2005)
Qualitative (Multiple
case study)
Eight incubators (four non-profit incubators, four
for-profit incubators)
Italy
Hausberg and Kor-
reck (2018)
Literature review (Bibli-
ometric and co-cita-
tion analysis)
347 articles regarding business incubation
N/A
Hughes et al.
(2007)
Quantitative (Cluster
analysis, multivariate
analysis of variance)
211 ventures from incubators
UK
Kambil et al.
(2000)
Qualitative (Interviews)
Companies practicing fast venturing (Staples,
Nordstrom and Wal-Mart); managers at ven-
ture capital firms, banks, securities firms; pro-
fessional-services firms
N/A
Kim et al. (2012)
Qualitative (Multiple
case study)
Two corporations practicing corporate venturing
(LG CNS, LG Electronics)
Korea
Kohler (2016)
Qualitative (Interviews)
40 interviews with managers and participants of
corporate accelerators
N/A
Maine (2008)
Qualitative (Case study)
Corporate venturing within a large chemical firm
(Evonik Degussa)
Germany
Markham et al.
(2005)
Qualitative (Interviews
and focus group
workshops)
15 managers from industrial research institutes
N/A
Neck et al. (2004)
Qualitative (Semantic
structure analysis)
15 founders of spin-off firms
US
O'Connor and
Ayers (2005)
Qualitative (Multiple
case study)
Twelve radical innovation project teams in ten
large, established companies; twelve compa-
nies with strategic intent to develop a radical
innovation competency (Air Products, Albany
International, Corning, Dupont, GE, IBM,
Johnson & Johnson Consumer Products, Ko-
dak, Mead-Westvaco, Sealed Air, Shell Chem-
ical, 3M)
US

- 39 -
Author(s)
Research method
Sample
Region
O'Connor and De-
Martino (2006)
Qualitative (Multiple
case study)
Twelve companies with strategic intent to de-
velop a radical innovation competency (Air
Products, Albany International, Corning,
Dupont, GE, IBM, Johnson & Johnson Con-
sumer Products, Kodak, Mead-Westvaco,
Sealed Air, Shell Chemical, 3M)
US
Ohe et al. (1992)
Quantitative (Constraint
analysis)
38 corporate ventures of 18 companies
Japan
Pauwels et al.
(2016)
Qualitative (Multiple
case study)
13 accelerators
Europe
Powell (2010)
Qualitative (Case Study)
One organization (Thermo Electron)
US
Robeson and
O’Connor
(2007)
Qualitative (Multiple
case study)
Twelve radical innovation project teams in ten
large, established companies; twelve compa-
nies with strategic intent to develop a radical
innovation competency
US
Simpson and Hill
(2004)
Conceptual
N/A
N/A
Trompenaars and
Woolliams
(2002)
Conceptual
N/A
N/A
Uittenbogaard et
al. (2005)
Qualitative (Multiple
case study)
Five multinational high technology companies,
containing a
separate corporate entrepreneurship function
N/A
Vanhaverbeke and
Peeters (2005)
Qualitative (Case study)
One company (DSM)
Netherlands
von Burg et al.
(2012)
Qualitative (Case study)
Six corporate venture transition processes
at two established technology firms
Netherlands
Weiblen and
Chesbrough
(2015)
Qualitative (Case study)
Two outside-in startup programs (AT&T
Foundry, Siemens TTB); two inside-out plat-
form startup programs (Startup Blueprint by
PayPal, SAP Startup Focus)
Europe / US
Zedtwitz and Gri-
maldi (2006)
Qualitative (Multiple
case study)
Ten incubators (two regional business incubators,
two university incubators, two independent in-
cubators, two company-internal incubators,
two virtual incubators)
Italy
Zedtwitz et al.
(2004)
Qualitative (Multiple
case study)
18 technology-intensive multinational companies
(ABB, Canon, Ciba, Daimler-Benz, DuPont,
Hewlett-Packard, Hitachi, Hoffmann-La
Roche, IBM, Kao, Leica, MTU, Nestle´, SAP,
Schering, Schindler, Unisys, and Xerox.)
Multina-
tional

- 40 -
Table 1: Summary of analyzed corporate incubation literature
Research
method
Parent
company
Corporate
incubator
Business
units
Knowledge
transfer
Conceptual
Descriptive
Qualitative
Quantitative
Objectives
Embedding
Support
Management
Processes
Services
Participation
Resources
Selection
Development
Spin-off
Aaboen (2009)

●
●
Ahmad (2014)

●
Allen and McCluskey (1990)

●
Barbero et al. (2012)

●
Barbero et al. (2014)

●
●
Becker and Gassmann (2006a)

●
Becker and Gassmann (2006b)

●●●
●
●
●
●●
●●●
Block et al. (2018)

●
Branstad (2010)

●
●●
●
Branstad and Saetre (2016)

●
●
Carayannis and Zedtwitz (2005)

●
Chen and Kannan-Narasimhan (2015)

●
●●●
Chesbrough (2003)

●
Chesbrough and Brunswicker (2014)

●
●
Chesbrough and Socolof (2000)

●
●●
Christensen et al. (2016)
N/A
●
●

- 41 -
Euchner and Ganguly (2014)

●
●
●
Ferrary (2008)

●●
Ford et al. (2010)

●
●
●●●
●●
Ford et al. (2012)

●
●
●●
Fryges and Wright (2014)

●●
●
Ginsberg and Hay (1994)

●
Grimaldi and Grandi (2005)

●
●●●
●
Hausberg and Korreck (2018)
Literature review
●
●
Hughes et al. (2007)

●
●
Kambil et al. (2000)

●
Kim et al. (2012)

●●●
●
●
●
●●
Kohler (2016)

●
Maine (2008)

●
●
●
●
●
Markham et al. (2005)

●
Neck et al. (2004)

●
O'Connor and Ayers (2005)

●
O'Connor and DeMartino (2006)

●●
●
●●
Ohe et al. (1992)

●
●
Pauwels et al. (2016)

●
Powell (2010)

●
●●
Robeson and O’Connor (2007)

●
●
●●
Simpson and Hill (2004)

●
Trompenaars and Woolliams (2002)

●●
●

- 42 -
Uittenbogaard et al. (2005)

●●
●
●
Vanhaverbeke and Peeters (2005)

●
●
●
van Burg et al. (2012)

●●
●●
Weiblen and Chesbrough (2015)

●
Zedtwitz and Grimaldi (2006)

●
Zedtwitz et al. (2004)

●
7
(16%)
2
(5%)
30
(70%)
4
(9%)

- 43 -
Table 2: Descriptive analysis of the identified literature
Journal
SJR
∑
1990
1994
1995
1999
2000
2004
2005
2009
2010
2014
2015
2018
Asia Pacific Journal of Management
1,676
1
1
Business Horizons
0,726
1
1
California Management Review
1,571
1
1
Creativity and Innovation Management
0,654
2
2
Entrepreneurship: Theory and Practice
4,240
1
1
European Journal of Innovation Management
0,596
1
1
European Management Journal
0,816
1
1
Int. Journal of Entrepreneurial Behaviour and Research
0,694
1
1
Journal of Business Venturing
4,923
1
1
Journal of Change Management
0,505
1
1
Journal of Engineering and Technology Management
1,079
1
1
Journal of International Management
1,829
1
1
Journal of Product Innovation Management
2,337
1
1
Journal of Small Business and Enterprise Development
0,575
1
1
Journal of Small Business Management
1,368
1
1
Journal of Technology Transfer
1,518
5
3
1
1
Long Range Planning
1,958
1
1
MIT Sloan Management Review
1,128
2
1
1
R&D Management
0,939
5
2
2
1
Research Policy
3,536
1
1
Research Technology Management
0,522
6
1
2
3
Small Business Economics
2,013
2
1
1
Technological Forecasting and Social Change
1,348
1
1
Technovation
1,794
5
3
1
1
Total Quality Management and Business Excellence
0,662
1
1
45
3
0
7
15
12
8

- 44 -
Fig. 1: Systematic search and selection process

- 45 -
Fig. 2: Framework of corporate incubation

- 46 -
Fig. 3: Process of knowledge transfer and venture development

- 47 -
Fig. 4: Governance structures during venture development

- 48 -
Fig. 5: Corporate incubator as knowledge broker between business units and ventures