Business incubation support and venture success: a capability-building model for SME entrepreneurs

Abstract This study examines how business incubation facilities for SMEs contribute to the success of incubated SME entrepreneurs through capability development within an entrepreneurial ecosystem. Drawing on the life cycle perspective and the resource-based view (RBV), the research proposes an integrated incubation capability model explaining how incubation support—such as training programs, workspace, and business networking—enhances innovation and skills capability, which subsequently strengthens resource mobilization capability and entrepreneurial self-efficacy, ultimately leading to successful venture creation. The study employs a quantitative research design using partial least squares structural equation modeling (PLS-SEM) with SmartPLS 4.0, based on primary data collected from 367 entrepreneurs with hands-on experience in incubation programs. The findings reveal that incubation support significantly improves innovation and skill capabilities, which in turn enhance entrepreneurs’ ability to mobilize resources and confidently develop new ventures. The study extends incubation literature by positioning business incubators as integrated capability-conversion systems that sequentially transform institutional support into entrepreneurial competencies and venture outcomes. By conceptualizing incubators as dynamic capability platforms, the study highlights their role in strengthening institutional mechanisms that nurture entrepreneurial competencies and sustainable venture development. The results suggest that incubator managers and policymakers should implement well-sequenced capability-building initiatives, integrate training, mentoring, and networking opportunities, and align institutional policies to effectively support SME development and promote innovation-driven entrepreneurship.