IPA: /ˈhɒt.bɛd/
KK: /hɑtˌbɛd/
A place or situation that encourages or supports the rapid growth or development of something, often something negative or undesirable.
The city became a hotbed of innovation and creativity, attracting many young entrepreneurs.
Hotbed is formed from "hot" (from Old English "hat", meaning having a high temperature) and "bed" (from Old English "bed", meaning a place for sleeping or resting). The term "hotbed" originally referred to a warm place, often used for growing plants, and has evolved to describe a place that fosters or encourages a particular activity, often of a controversial or intense nature.
Think of a 'warm place' ('hot') that serves as a 'base' ('bed') for growth or activity — that's why a hotbed is a place that encourages certain developments.
No commonly confused words.