Incubation in Entrepreneurial Ecosystems

The Portuguese business incubation system has grown considerably since the late 1980s, when there were only two incubators (AITEC in Lisbon and NET in Oporto). This growth was initially fuelled by the National Association of Young Entrepreneurs (ANJE) and the National Employment Institute (IEFP), which created their own network of incubation centres in 1990s. Access to European Union (EU) Structural and Investment Funds then stimulated universities and municipalities to create and support business incubators. The economic recession and rising unemployment that started in 2008 led to growing interest in incubators and entrepreneurship. From 2011 onwards, new incubators founded in inner-city areas, such as “Startup Lisboa”, were able to rapidly capitalise on the development of large local startup communities.

As of January 2024, there were 138 certified incubators within Startup Portugal’s National Network of Incubators (RNI), which collectively supporting a total of 4 983 businesses, 1 869 of which are classed as having an innovative or scalable business model. The population of certified incubators is concentrated in the North, Lisbon and Centre regions, specifically in the cities of Lisboa, Porto, Aveiro, Braga and Coimbra. In all regions, the dominant incubator type is the “Regional Business” incubator, which are created or sponsored by municipalities. It is important to distinguish between regional business incubators located in low density areas that generally focus on supporting local development and employment, and those situated in large cities with a greater capacity to form international partnerships and generate a pipeline of innovative, investment-ready, and scalable startups. An example of the latter type of regional business incubator is Startup Lisboa, which was founded in 2012 with strong support from the city council and serves as a hub for the Lisbon startup community. In 2022 Startup Lisboa launched the “Unicorn Factory Lisboa”, which includes a new focus on scaleups and internationalisation. The site for the Unicorn Factory Lisboa – the “Beato Creative Hub” building – is one of the largest spaces for entrepreneurship and innovation in Europe, with around 50 000 square meters of space distributed over 18 buildings and a capacity to host more than 3 000 people. In 2023, the Portuguese Agency for Competitiveness and Innovation (IAPMEI) and Startup Portugal launched two calls for proposals aimed at supporting projects to develop incubation and/or acceleration services in the fields of entrepreneurship and innovation, which are essential for the launch and growth of startups. These measures established a support amount between EUR 30 000 and EUR 150 000. The approved entities are in the final phase of implementation as of May 2026.

Many of Portugal’s most effective incubators are also attached to universities. Examples include UPTEC at the University of Porto, IPN at the University of Coimbra, UAIncubator at the University of Aveiro, and TecLabs at the Faculty of Sciences of the University of Lisboa.

92% of business incubators in Portugal offered services to support the development of business models, while 88% reported providing services to support in obtaining funding and for networking. Communication and marketing supports are other important components of the Portuguese incubators’ service offering. A large proportion of incubators do not appear to have a specialised focus, although there are some examples of specialised incubators in Portugal, such as Fintech House, Sanjotec (in S .João da Madeira), the Start-to-Table accelerator (promoted by Startup Lisboa), and BLC3, which is located at Alfândega da Fé and Ourique and is the only BIA identified that specialises in the bio and circular economy.

The introduction of the National Network of Incubators (RNI) is a very important development for Portugal’s incubation and acceleration system. The RNI is operated by Startup Portugal – a non-profit organisation that was formed in order to support the government in the creation and implementation of the National Strategy for Entrepreneurship. The long-term vision of the RNI is to strengthen the national incubation and acceleration system by encouraging and incentivising Portuguese incubators to become more professionalised and adept in supporting startups and scaleups. To achieve this, the criteria for participation in the RNI will be gradually tightened, creating an incentive for the members to professionalise and boost their competencies. In addition, RNI membership must be renewed on an annual basis to ensure that members remain up to standard. A key task for the RNI is to raise the capacity and internal competencies of incubators from across the network, particularly those in low-density or rural areas that currently have a limited capacity to support high impact startups and scaleups. This is being achieved through capacity building and training activities. Peer learning is also fostered through an annual networking event for incubators in the RNI.

Public funding is important in Portugal’s incubation system. Regional business incubators located in low density areas typically rely on public funding sources, usually from the EU funds and municipalities. University-based incubators also tap into funding from EU sources. The EU-funded “Vouchers for Incubation and Acceleration” initiative provides grants ranging in value from EUR 30 000 and EUR 150 000 to incubators, with a total allocation of EUR 20 million. To receive financial support through the programme, the incubators must be located in Portugal, have a proven track record of support startups, and be developing new services to support startups. The programme has a total allocation of EUR 20 million. The awarded grants can go towards eligible expenditures such as the costs of technical personnel, the acquisitioned of specialised external services or the protection of intellectual property rights. The funded projects have a maximum duration of 18 months.

Other funding instruments also exist, such as the Empreende XXI1 programme launched in 2023. In this programme, incubators that offer mentorship and support to startups in producing financial viability reports are funded proportionally to the number of reports produced and the amount of mentorship provided.

Portugal also has initiatives in place to support startups’ access to mentors. These include IAPMEI’s National Network of Mentors and the Startup Voucher programme. However, these initiatives are not directly integrated within the incubation system. Another relevant measure is an RRP-funded initiative that aims to reinforce physical infrastructures and equipment and enhance testbed services for SMEs and startups. Meanwhile, the “investment meetups” organised by Startup Portugal (“SIM - Startups & Investment Matching”) are helping to address gaps in support in building startups’ investment-readiness.

The rapid development of Portugal’s incubation and acceleration system over the past 10 shows has been fuelled by the sustained provision of public support at the municipal level combined with a conducive national policy framework that includes a range of financial and non-financial supports for incubators and accelerators. This has resulted in a strong coverage of incubation and acceleration support across the different parts of the country, including several highly performant incubators and accelerators concentrated in entrepreneurial or innovation hubs with a strong track record in stimulating the creation and growth of innovative startups and scaleups. These types of incubators and accelerators are currently transitioning towards more sector-specialised approaches, an example being the recent launch of the Gaming Hub within the Unicorn Factory Lisboa.

Startup Portugal’s National Network of Incubators (RNI) stands out internationally as a leading example of how a national co-ordinating entity can help to create a more cohesive and effective incubation and acceleration system. While the RNI is still relatively young, it has so far proved an effective orchestrator for the system, providing a variety of training and networking opportunities to its members. These include a dedicated training programme for incubator and accelerator managers – which is to be delivered by the “Founder Institute” – as well as periodic online and in-person network events, which are providing opportunities for peer learning and collaboration. The RNI also collects data on the activities of its incubators and accelerators, which is an important source of information on the performance and characteristics of the national incubation and acceleration system.

Another aspect of Portugal’s policy approach that offers lessons for other countries is how different public entities that are active in the wider entrepreneurial ecosystem are engaging with incubators and accelerators. For example, Portugal Ventures – the public venture capital fund – has an extensive country wide network of incubators that function as its “ignition partners”, providing Portugal Ventures with opportunities to identify promising investment opportunities and incubators’ clients with enhanced access to funding opportunities.

Despite the positive developments in recent years, further progress is needed to raise the capacity of incubators in low density areas. Initiatives such as the “Vouchers for Incubation and Acceleration” scheme are helping to do this by providing financial support to a broad base of incubators and accelerators across the country. This is important in helping these entities to expand and improve the supports they offer to startups and scaleups.