Public versus Private Technological Incubator Programmes: Privatizing the Technological Incubators in Israel

Private technological incubators began operating in Israel in 2000, and developed thanks to the rapidly growing private (venture) capital (VC) sector, which traditionally had not funded such projects. The present study examines the differences and similarities between two types of technological incubators—public and private. It addresses the question whether the need still exists for the Public Technological Incubators Programme (PTIP). Based on our empirical analysis and findings, the main conclusion is that private incubators cannot fully replace public incubators; even after the entry of the private sector into the area of technological incubator activity, there is still justification for the continuation of the PTIP. Private incubators tend to concentrate in selected fields, whereas public incubators sponsor a large variety of activities. The PTIP was found to provide answers to advancing national objectives, such promoting peripheral regions and providing special incentives to selected population groups (e.g. new immigrants) for whom such activities would otherwise be out of reach.