Incentives can be defined as motives that motivates a person to go an extra mile to achieve something. An incentive can be monetary and non-monetary, and intrinsic and extrinsic.
When government and businesses offer incentive, they do so to increase the opportunity cost of making an economic decision. Government invest public resources in private business and firms to obtain investment return. Whereas, business offers incentive to motivate it's employees to work harder to achieve something. In both cases, it is done to increase opportunity cost to impact economy.
