ENTREPRENEURSHIP AND INNOVATION November 2002 285 Virtual incubation of research spin-offs Jaap van Tilburg, Peter van der Sijde, José Molero and Pepa Casado Abstract: This paper explores the concept of ‘virtual incubation’. Based on the notion of the virtual organization the authors develop this concept and relate this to phases in the development of companies (from pre-start- up to growth). Next the different tasks a virtual incubator can fulfil are developed and illustrated with some examples of virtual incubators that are already operational in Europe. The final section of the paper draws conclusions regarding the commitment of stakeholders, the best focus for virtual incubation and the kind of services required. One interesting option is the combination of a non-virtual incubator with virtual elements. Keywords: incubator; university spin-offs; entrepreneurship Jaap van Tilburg is with Top Spin International(TSI), a joint foundation of the University of Twente and Van der Meer & Van Tilburg, The Netherlands.Website: www.topspin.org.E-mail: tilburg@innovation.nl.Peter van der Sijde is with the Dutch Institute for Knowledge Intensive Entrepreneurship(NIKOS), University of Twente, PO Box 217, 7500 AE Enschede, The Nether- lands. E-mail: P.C.vanderSijde@sms.utwente.nl. José Molero and Pepa Casado are with Vivero Virtuel de Empresas de la Communidad de Madrid, Spain. E-mail: inceiy@sis.ucm.es. There are more than 800 business incubators in the European Union today.According to a recent EU report on benchmarking business incubators, it appears that all of them focus on the provision of physical space as the basis of the incubator model (European Commission — EC, 2002a). One of the recommendations of this report is to develop ‘virtual’incubationservices so that more businesses can benefit from them, and through after-care/ graduationnetworking,to ensure that job and wealth creation effects are retained in local economies.This is seen as one of the lessons that traditionalincubatorscan learn from ‘new economy’incubators. Such incubators could overcome the physical space constraints by making better use of information and communication technologies(ICT) to extend the client base. The principle is that the real value added of new business incubationlies in the sharing of know-how rather than in just offering physical incubation space and functions. Comparing the USA, which has about 1,000 business incubators, with the EU in the European Benchmarking study (EC, 2002a), the latter was found to have developed more experience with ‘virtual networks’. This paper focuses on ‘virtual incubation’, the virtual aspects of new business incubation and describes the European experience. The paper addresses the following topics:  What is virtual incubation?  Is virtual incubation different from or more than the Website of an incubator?  What are the differences between physical and virtual incubation?  Which incubator tasks can be fulfilled virtually?  What experience is available in the provision of virtual incubation services? What is virtual incubation? Before defining virtual incubation we will first clarify the elements ‘incubation’ and ‘virtual’. Definition of ‘incubation’ Definitions of ‘incubators’are given by organizations such as the National Business Incubation Association