This paper explores Technology Business Incubators (TBIs) and their chosen Business Incubation Models. The business models of TBIs have been largely ignored or seen as explained through stratification classifications (e.g. university incubator, virtual incubator etc.). Taking a qualitative approach, five next generation TBIs clustered in the Zhongguancun region of Beijing, the 'Chinese Silicon Valley', are analyzed. Framed in the resource-based view this work contributes to the literature through the exploration of: (1) The strategies implemented by next generation TBIs in China (2) The business models of these incubators (3) The fit between each incubator's business model and their respective strategy. Ultimately this study disentangles how the varying availability of resources and incubatees' ability to absorb these resources guide incubator strategy.

Since the late 1980s, the business incubator model in China has been evolving—from the early traditional model that focused mainly on providing basic services, such as office space and one-stop administrative services, to an emerging value chain model (value position, value creation, value transfer and value capture), which efficiently combines the profits of an incubator with the success of its incubating tenant ventures. This article analyses the case of ‘Innovation Works’, which is one of the pioneers of the value chain model in China. It raises the following research questions: (a) how does the incubator business model evolve over time in China? (b) What differentiates the value chain business incubator model from the traditional model? (c) What are the critical elements that contribute to the success of a value chain business incubator model? Using primary data gathered through interviews, on-site visits and surveys, the study found that the incubator business model in China has been reshaping towards more complex value propositions and more efficient value chain models. The study also found that specialisation, flat organisational structure and professional management team are the critical elements that contribute to the success or efficient performance of the value chain business incubator model. This article makes significant contributions to the literature and draws policy implications for future business incubator development—both in China and in other emerging economies.