Given empirical findings that link entrepreneurship, small businesses, and economic growth at the macro level (Audretsch, Keilbach, & Lehmann, 2006), this study develops a model and propositions that link business incubators to localized economic growth. Specifically, the research applies a ‘micro-economy’ lens to investigate how and why the relationship between incubators and economic growth may vary across geographic regions, specifically as a function of the localized market failures that policy-makers position the incubators to resolve.