European Journal of Business and Innovation Research Vol. 1, No. 1, March 2013, pp.19-25 Published by European Centre for Research Training and Development, UK (www.ea-journals.org ) 19 The Effect of Business Incubation in Developing Countries Hanadi Mubarak Al-Mubaraki College of Engineering Kuwait University, Kuwait Michael Busler Richard Stockton College, USA Abstract: The aim of this paper is to review the literature and show the strength and weakness of business incubation in developing countries. This paper is based on a wide literature review, focused on the identification of the incubators as tool for economic development. We found that 1) business incubators provide support for start-up companies, 2) graduated companies tend to have a greater probability of success and 3) graduated companies have a significant positive impact on economic development. These findings can help policy makers, governments, and practitioners with their implementation in incubator programs, leading to better planning and a greater chance of success. This paper contributes to enhance the understanding of the strategic implementation of incubator models in developing countries and provides useful information to both academicians and practitioners who are interested in incubator programs. Keywords: Strategic, developing countries, Incubators, Economic Development 1.0 Introduction There are many definitions for business incubation. However, most agree that a business incubation program is an economic and social program which provides the intensive support to start-up companies, coach them to start and accelerate their development and success through business assistance program. The main goal is to establish the successful start up companies that will leave the incubators financially viable and freestanding. In addition, the graduate companies’ outcomes are jobs creation, technology transfer, commercialize new technologies and create wealth for economies. The literature has proven that there is a positive impact of business incubators goals. First goal is generally to support regional development through job creation (Allen and Levine, 1986; Mian, 1997; Thierstein and Wilhelm, 2001). The second goal is for the incubator to generally aid in the growth of new ventures (Campbell, 1989; Petree, 1997). The third goal is for incubators to foster technological innovation and industrial renewal (Allen and Rahman, 1985; Similor and Gill, 1986; Allen and McCluskey, 1990; Mian, 1996). The objective of this paper is to show the strength and weakness of business incubation in developing countries. We will focus on the identification of the incubators as tool for economic development. The paper is structured as follows: Section 2 provides a thorough review of the literature on the concept of economic development. In Section 3 the research methodology included the evidence from the literature review and ten successful case studies to illustrate the different key performance of the business incubation. In Section 4, the authors briefly discuss the finding of the study drawn from quantitative approaches of incubators. Section 5 concludes with implications of the business incubators from successful developing countries. 2.0 Related Literature Review of Concept of Economic Development Economic development is defined as the process of creating wealth through the mobilization of human, financial, capital, physical and natural resources to generate marketable goods and services. The economic developer’s role is to influence the process for the benefit of the community through expanding job opportunities and the tax base (AEDC 1984, p. 18). This definition captures the two aspects of the term economic development. It refers to both a process and a practice. The economic development process is viewed as a growth process-the mobilization of