The university wants to revive the Edinburgh Pre-Incubator Scheme (Epis) with a similar initiative after Scottish Enterprise pulled the plug on funding.
But Tom Stokes, from the Business Centre Association, called for Epis to be used as a template for a network of incubators across the country.
Stokes, managing director of accommodation provider Evans Easyspace, said such support should be available to all new firms regardless of their sector.
"The BCA has always been uneasy about certain aspects of publicly funded business space because it distorts the market and threatens to reduce private sector investment, possibly leading to a reduction in overall space.
"It can't be a bad thing to provide help for new and emerging businesses but we would like to see the concept extended to all start-ups and not just a relative few."
Stokes also called for central and local government to scrap their "very complicated support packages" and instead offer "a simple regime of free or subsidised accommodation for start-ups".
Epis came to an end in September after funding from Scottish Enterprise and the European Regional Development Fund ran out. During its five years, the scheme helped to launch 53 companies, which last year turned over 9.3m.
Epis offered business and academic mentoring to start-up technology companies and subsidised accommodation.
Colin Borland, public affairs manager for the Federation of Small Businesses in Scotland, agreed that incubator support should be offered to all start-up businesses and not just "whatever sector is flavour of the month".
He added: "We have long argued that we should be using more of the vacant units in our town centres as affordable work space for new or small businesses. Not only does this reduce cost and risk to the business, it gets more people doing business and spending money in the town."
Edinburgh University declined to comment on whether Epis could be used as a template because it is still exploring options to revive the scheme.
Last week, the university revealed it was seeking new ways to fund the programme. Its other business support schemes - including Informatics Ventures, and Launch.Ed - have been unaffected by the closure of Epis.
Some of the firms launched by the scheme include Pufferfish, which makes spherical displays that have been used by the band Coldplay at its concerts, and Burdica Biomed, which recently signed a multi-million-pound deal to sell its fertility treatment in China. A spokeswoman for Scottish Enterprise said entrepreneurs were asking the agency for "advice and support, not the bricks and mortar business accommodation".
She added: "We are currently working through our business plan priorities and our incubation support will be reviewed within this planning."