October 18-20 | Tucson, AZ

The Research Institution GAP Fund and Accelerator Program Summit

The What and Why Behind Corporate Incubators

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October 18-20, 2023 / Tucson, AZ
The annual summit for research institution gap fund and accelerator programs, including proof of concept programs, startup accelerators, and university venture funds

The Story

Over the past decade, innovation and flexibility have seemingly only gone hand-in-hand with startups and small businesses. Their composition allows them to be nimble in creating ideas that larger companies may not have the time nor flexibility to pursue.

However, one of the main problems startups and entrepreneurs face is having enough financial capital to see projects to completion. Well, what if there was a way to combine the creativity and innovation of startups with financial resources and the relative stability of corporations? In recent years, both parties have found a way to leverage each other’s strengths to make this happen.

innovationWhile corporate incubators are not a new concept, they have seen a recent uptick. Corporate incubators are programs or initiatives that may provide funding, mentorship, and physical space for startups to collaborate with others while developing projects within the company.

These projects will typically relate to the company’s mission and products or services they already develop. So, why do corporate incubators and exist and what are their benefits? See how these programs are providing the market with the best of both worlds.

Why Do Corporate Incubators Exist?

The first corporate incubator can be traced back to the 1950s, and its primary purpose was to bring back local business and jobs to an area that had experienced a significant economic decline. Now, companies are more interested in disruption and breaking through the status quo to find the “next big thing.” One can look no further than Y Combinator’s success with Redbox, Airbnb, and Dropbox to see that providing space, funding, and mentorship can foster the next game-changing idea within an industry. However, what is exactly in it for the companies? Some recent corporate incubator openings in the Metro Atlanta area can shed some light on the trend.

Providing Answers to Industry Challenges

In June 2018, Georgia Pacific launched The Point A Supply Chain Center, a 15,000-square foot corporate incubator at Atlanta TechSquare Labs. The goal of this program is to bring together companies, startups, and academic institutions to create solutions that foster efficiency around global supply chains. The Point A Supply Chain Center explains that “it is not a research facility,” but that it provides space for developing solutions, experimentation, and training rooms. One of the main charges this Center plans to take up is providing connections between companies that need answers with those who likely have solutions.

Tapping into New Markets

Due to their large size and the money already invested in primary R&D solutions, corporations do not always have the time or money to explore entrance into new markets. Creating a corporate incubator provides a lower-risk opportunity to step into new industries while still maintaining their own identity and main product line. Mercedes put this idea on display when they opened Lab 1886 in Buckhead.

Their mission is to “combine the best of both worlds: the power of a global company with the freedom of a startup.” The goal of this Atlanta hub is to bring new technologies to the masses while also focusing on developing mobile applications. For example, car2go billed as “the world’s first free-floating carsharing service,” is being developed at Lab 1886. Collaborators are also working on an electric air taxi, vehicle subscription service, and mobility app. These are new services that are related to what Mercedes does, but something their main teams would likely not have the time nor flexibility to see through.


Source: Atlanta’s Growing Innovation Hub: The What and Why Behind Corporate Incubators

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