The upgrade to hybrid incubators in China: a case study of Tuspark incubator

Purpose This study aims to explore key factors and specific ways for the upgrade to hybrid incubators in the context of China. A hybrid incubator means that a technology-based business incubators (TBIs) can implement various distinct value creation processes with the integration of the advantages of non-for-profit and for-profit TBIs at same time as Chinese government now requires government-sponsored non-for-profit TBIs to be profitable self-sustainability with less dependent on direct public subsidies, aiming to motivate these TBIs to provide higher quality services for their tenant new technology-based firms (NTBFs). Design/methodology/approach This study conducts a single in-depth case-study of Tuspark Incubator (located in Tsinghua Science Park [TSP]) with categorical analysis. Findings Three factors, i.e. incubation subdivision, intermediary platform and proactive approach, are found to be essential for a formerly government-sponsored TBI’s upgrading. Incubation subdivision enables Tuspark Incubator to create multiple incubation processes with incubator characteristic variables of both non-for-profit and for-profit incubators; with the establishment of intermediary platform, Tuspark Incubator provides specialized business support and high-quality networking from relevant specialized service organizations external to the incubator; more proactive approach with equity investment on incubating firms from Tuspark Incubator help to generate social welfare and financial profit at the same time. Practical implications For the incubators’ managers, incubation subdivision enables TBIs to operate for-profit and non-for-profit processes at the same time and provides different specific needs; more open intermediary service platforms can leverage the full potential of the actors in innovation system and help TBIs to save resource when upgrading to hybrid incubators; proactive approaches nurture learning climate and entrepreneurship environment to enhance the successful rate on NTBFs inside incubators and provide main profit source for incubators. For policy makers, using proactive approaches including creating a good milieu for incubation on technology-based start-ups and the design of public guidance funds is increasingly crucial. Originality/value This research is a pioneering study on the key factors and specific ways for the upgrade of government-sponsored non-for-profit TBIs in China to hybrid for-profit and non-for-profit incubators.