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2.
Verb, apparently. American version of the much simpler root word "incent".

Why they can't seem to cope with this much simpler word, I don't know.. obviously doesn't sound important enough.
From dictionary.com (yes, that's right, it's listed - to make matters worse, their definition of "incent" says, "to incentivize"):

"This bill will help incentivize everybody to solve that part of the problem” (Richard A. Gephardt)."

How absurd is that. Gah.
by Grammar Police Sgt Killgore October 15, 2004
 
1.
A corporate-jargon non-word meaning "motivate," coined in 1968. Some 10 years later, it was shortened to the equally annoying verb "incent." Unfortunately, both are recognized by both Merriam-Webster and the OED.

The only respectable form of the word is the noun "incentive."
I would like to motivate him to never say "incentivize" again by telling him I will rip his windpipe out of his throat the next time I hear him say it.

I hope everyone who says "incentivize" in earnest knows they come across as a jargon-spewing ahole.
by StephakneeSays July 13, 2008