The term ‘corporate innovation’ has become a staple of today’s business world—and understandably so. Even as far back as 2010, 84% of executives cited corporate innovation as ‘extremely or very important to their companies’ growth strategy.’ In the time since then, the focus on innovation has not wavered. If anything, it’s become even more crucial for businesses.
You don’t have to look far to find out why this is the case. A 2019 OECD report on innovation indicators makes it clear that the 53% of firms that introduced a new product or business process from 2014-16 were responsible for 70% of employment in the business sector. The report also found that innovative companies are more likely to be active in international markets, providing access to a broader customer base. BCG further backs up the importance of technological innovation, as the companies on the most innovative list for 2019 are also the unrivalled market leaders.
But not everyone is hopping on the bandwagon. Back in 2010, despite how important they saw it, only 6% of executives were content with their innovation strategies. What’s more, the OECD states that ‘only a fraction of firms adopt innovations that are new to their markets’ and there is a lack of support for such initiatives. They claim that ‘36% of R&D performing firms and 13% of non-R&D performing firms that undertake other types of innovation activities receive public support for innovation.’
The fact is, driving innovation in a corporate environment often requires bringing together key stakeholders with specific strengths. But as we can see from current trends, corporations can benefit from available support and turn potential incumbent threats into innovative allies. Conversely, young start-ups in high-risk stages or R&D professionals in need of funding can benefit from the support of larger, more established market entities.
Understand the environment
It may sound underwhelming to say that the pace of disruption is speeding up. We hear it so much that we’ve nearly become immune to its message. To be fair, this has been a trend for many years now. But regardless of whether you’re an executive in a large organization or a new, innovative start-up founder, it pays to continue taking notice—because, either way, it means more competition.
Services like AWS, Microsoft and cloud applications have made it easier than ever before to launch a start-up, and the most successful of these can rise more quickly than imaginable to shake the foundations of corporate giants. A perfect example of this is in the Fintech sector, where the astounding initial success of new incumbents meant banks were forced to rush to catch up.
And yet we mustn’t forget that 92% of start-ups are destined to fail. Even the most high-potential ventures may not succeed without adequate support, investment and room to grow. The speed of disruption means there’s no time for anyone, big or small, to delay making decisions. This is especially true for corporations—where more risk is involved—as keeping pace with innovation can be a matter of survival.
If you can’t beat them, invest in them
A glass-half-empty person may look at this as a fail-fail environment, where corporations are constantly fighting off a sea of start-ups and only a select few start-ups make it through to experience success. Of course, as the trends show, this is not the case at all.
One solution for larger corporations is to change how they invest. In recent years, mergers and acquisitions have fallen, giving rise to corporate venture capital. Just over a decade ago, the amount of venture capital (corporate or otherwise) was estimated to be at around $50 billion. As of 2019, that figure was revised to be at $295 billion—and it has likely risen since then.
Given their tendency to have a larger cash flow, it makes sense for corporations to invest in high-potential start-ups. This approach played a huge role in banks’ recovery in the financial sector and has become a staple of the tech giants. Facebook has even started its own venture capital arm, hoping to build on the success of Instagram and Whatsapp.
Tech transfer: tailored innovation
While corporations investing high-potential start-ups is a valid approach, one of the most exciting trends in today’s innovative landscape is the rise of tech transfer initiatives. In many ways, tech transfer offers corporations, start-ups and R&D institutions the best of all worlds, while mitigating risks.
By identifying business challenges, tech transfer specialists are able to match them with entrepreneurs or scientists who are uniquely qualified to spearhead corporate innovation. Beyond simply bringing the various parties together, tech transfer organisations provide space for innovation and experimentation.
The beauty of tech transfer is that it coincides with a number of other trends, whether innovation labs (similar to R&D departments but with different missions) or the rise of smart workspaces, and it even provides preferential opportunities for investment. In short, it’s a melting pot of talent, innovation and development that can open the door to long-term success.
Corporate innovation goes far beyond the corporations themselves, potentially involving a wide array of stakeholders who all have vested interests in driving innovation. Whether scientists, entrepreneurs or executives, today’s fast-paced context and ever-developing trends have resulted in a landscape that’s brimming with opportunity.
The Collider: pioneering tech transfer
The Collider is a venture-building programme that works hard to bridge the gap between science, corporates and entrepreneurship. This innovation project encourages tech-transfer initiatives to connect science and entrepreneurial talent and create disruptive technology-based start-ups. The Collider is powered by Mobile World Capital Barcelona, a tech-focused initiative that aims to drive the digital transformation of society to help improve people’s lives globally.