Abstract
This paper assesses the venture's learning and capability development during the incubation and post-incubation periods. The case studies show incubatees' capability and learning divergence across multiple cases. First, the selection environments – incubation and market – shape the knowledge and capability development. Specifically, R&D support with greater access to facilities liberates incubatees with domain knowledge to sustain their ventures during and after incubation. Second, learning and capability developments are highly constrained by the owners' domain knowledge distinction that limits their ability to appropriate employees' knowledge and the knowledge from incubation support system. Third, the interplay in the owner's domain knowledge, incubation support system, learning and capability development are dynamic where each reinforces one another. Overall, the selection environment features are critical junctures in driving evolutionary changes only when they co-evolve with other factors. The paper concludes with policy and managerial implications.
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