Expect Innovation Budget cuts. A growing number of the world’s Top100 companies are about to reduce their innovation spending in 2024. This is the main evidence of the “Open Innovation Outlook 2024 – Macro-trends for 2024 in Corporate-Startup Engagement” just released by Mind the Bridge.

As a summary of the key outcomes from the discussions held in Paris in December 2023 during the closed-door session of the annual Corporate Startup Stars Awards – organized by Mind the Bridge and the International Chamber of Commerce – the Report includes the findings of a structured survey circulated at the end of the session, where the head of innovations of world’s top 100 companies are asked about the innovation budget for the upcoming year.

Compared to the answers provided in the previous years, some trends emerge: 

  • The group of companies increasing investments in Open Innovation remains stable: from 32% for the past two years to 27% in 2024
  • The group of companies that plan to maintain the same level of spending decreased by 16%, from 62% to 46%
  • The group of companies cutting innovation budgets is progressively increasing: from 3% in 2022 to 27% in 2024.

“The top companies continue to invest in (open) innovation despite the overall economic conjuncture and the VC pullback that hit the startup scene. That’s the most powerful message emerging from the data. The issue is that a growing number of incumbents do not have the same level of clarity in terms of strategic vision and bargain EBITDA today with survival tomorrow.” commented Alberto Onetti, Chairman of Mind the Bridge. 

  • Open innovation models are constantly evolving, adopting a more “hybrid” and “sophisticated” approach.

As a matter of fact, the Venture Client emerges as the most utilized Open Innovation tool (95%), showing consistent use expected in 2024. Antennas follow closely at 87%, with 3% planning to initiate and 5% planning to reduce their use. Intrapreneurship is adopted by 84% of companies, showing a 5% variance between those planning to initiate or reduce its implementation. Additionally, 78% utilize Corporate Venture Capital (CVC), and 5% are planning to launch it. Mergers and Acquisitions (M&A) are in the toolkit of 73% of the respondents, with an additional 8% planning to engage in such activities in 2024. Conversely, for Accelerators, although 54% are currently using them, 11% intend to downsize. The most significant change pertains to Venture Builders (51%), with an expected 14% increase (but 5% of companies are already reassessing their decision).

  • Open Innovation Needs Organizations and Top-Level Buy-In

92% have a dedicated Open Innovation unit, 46% have a dedicated C-level executive, with another 46% have one level of separation between the person in charge of Open Innovation and the top management, and only 8% have 2 or more levels of separation from the C-suite. 

  • Innovation is about Strategic Evolution not just Technological Progress

“The ultimate goal of Open Innovation is to trigger strategy evolution rather than mere technology progress – added Marco Marinucci, CEO of Mind the Bridge – According to our data, 97% of companies emphasize the impact of Open Innovation actions on Strategy, surpassing the 92% that highlighted Technology, 73% in Sustainability and 70% in Financial impact, A 30% of respondents also referenced the impact on Diversity, while 8% factor Cultural impact”.

  • What keeps CIOs up at night?

What do the innovation leaders say when asked about their priorities for 2024?
“Terms like GenAI and Deep Tech show to be prominently featured in their New Year’s resolutions. Sustainability, encompassing Climate and Decarbonization, emerges as an almost universal priority, alongside occasional mentions of Diversity”, ended Alberto Onetti.