Using U.S. Census Bureau employee-employer matched data, we provide the first direct empirical evidence that firms’ intangible investments raise their employees’ portable human capital, designating these firms as “human capital incubators.” We introduce a model where workers’ preferences for skill development shape labor supply, giving incubators a labor-market advantage and an additional motive to invest in intangibles. Consistent with the model, incubation correlates positively with firm profitability, market power, and inflows of young workers. For top-tercile incubators, the present value of incubation is worth about 13% of firm value: roughly 43% of this value is internalized by incubating firms as wage savings, while 57% accrues as a spillover to workers and downstream employers. The aggregate externality across the whole distribution is worth 7% of total income. In a counterfactual equilibrium where workers cannot differentially price firms’ incubation capacity, diminished investment incentives lead to losses in aggregate income, intangible capital stock, and average worker skill.