University business incubators in Indonesia: Navigating commercial viability and societal contributions

• University Business Incubators (UBIs) that allocate greater resources to societal start-ups demonstrate higher innovation performance, particularly within the context of developing economies. • Supporting a larger portfolio of societal start-ups is associated with a higher rate of successful exits. • Tailoring incubator services to the specific needs of societal start-ups enhances both economic outcomes and social impact, reinforcing the value of customized, mission-driven incubation strategies. This paper investigates whether University Business Incubators (UBIs) that emphasize broader societal impacts can achieve improved innovation performance and economic returns within the context of a developing economy. Utilizing data from Indonesia, this study employs Heteroscedasticity and Autocorrelation Consistent (HAC) regressions to determine whether incubators focusing on societal innovations achieve greater success in bringing innovations to market. Incubators devoting a higher proportion of their budget to societal start-ups have a stronger innovation performance, and ones with a higher number of societal startups have a higher number of successful exits. The small sample size may restrict the generalizability of the findings, limiting the ability to apply the results across different contexts or larger populations. Start-ups with societal impacts provide benefits for both incubators and society. Therefore, incubators should strive to support more start-ups among their tenants that contribute to broader economic, social, environmental, and cultural goals. Extant literature provides a broad assessment of the various support services incubators offer to start-up firms; however, more empirical analysis is needed regarding the success of incubators that try to align financial goals with positive societal impacts.