Incubation Under Institutional Fragility: Challenges and Strategic Responses from Higher Education

University-based incubators are recognized as catalysts for entrepreneurial development in higher education. This study investigates the challenges and strategic responses of higher education incubators operating within transitional economies. Anchored in Resource-Based Theory (RBT), the research conceptualizes incubators as dynamic orchestrators that co-create and mobilize resources through social and institutional interactions, rather than merely possessing them. To complement this internal lens, Entrepreneurial Ecosystem Theory (EES) is integrated to capture how policy volatility, funding limitations, and stakeholder interdependencies shape incubators’ adaptive capacity. Drawing on semi-structured interviews with 11 heads of university incubation centers in Karachi, Pakistan, this study employs a two-stage qualitative design combining thematic and sentiment analyses. Findings reveal seven challenges ranging from governance discontinuities and mentorship deficits to weak entrepreneurial culture and funding scarcity and four strategic domains: programmatic design, ecosystem linkages, capacity and culture building, and governance and operations. The study extends RBT by illustrating how resource value is contextually enacted and socially embedded under institutional fragility, while contributing to EES by positioning incubators as adaptive agents that co-evolve with fragmented entrepreneurial ecosystems. These insights advance theoretical understanding of resource orchestration and ecosystem adaptation within higher education incubation and offer actionable guidance for policy in transitional economies.