The current economic climate and political uncertainty are not going to impact the growth of open innovation, say the innovation leaders.
Which are the Macro-Trends for 2019 in Open Innovation and Corporate-Startup Engagement? What are the Critical Barriers to Overcome?
Mind the Bridge and Nesta tried to answer these questions through the brief report titled “Open Innovation Outlook 2019“, based on interviews with the heads of innovation/senior execs participating in the Open Innovation Workshop they organized as part of the 2018 Europe’s Corporate Startup Stars Award Ceremony in Brussels on November 22nd.
Over 30 innovation leaders – from ABB, ABInBev, Acciona, Amadeus, Amazon, Barclays, BBVA, Bosch, Centrica, Cisco, DB, Dell, Edp, Enel, Ferrovial, Fiege, Google, Iberdrola, KBC, Kpn, LVMH, Mastercard, Nouryon, Qualcomm, Rabobank, RBS, Royal BAM Group, Banco Sabadell, Salesforce, Samsung, Santander, SAP, Sonae, Sodexo, Virgin and Vodafone – participated in the research that has been released today.
In this research, Mind the Bridge and Nesta focussed on six modes of collaboration:
- gaining “exposure” to startups (potentially through one-off events, such as hackathons, as well as sponsoring co-working spaces);
- “trend-spotting” (through a direct presence in global technology hotspots, such as Israel or Silicon Valley);
- acceleration programmes;
- procurement and co-development;
- acquisitions. Innovation leaders are currently engaging European startups by implementing at least 3 of these mechanisms, and used 5 on average.
Looking at 2019, here are the Macro-Trends detected for companies active in Open Innovation:
- Procurement (via funded proof of concepts and co-development programs) continues to be the predominant mode of corporate-startup engagement (the forecast is that 97% of innovation leaders will use this mechanism).
- More corporates are planning to open Innovation outposts in Silicon Valley and Israel. 6 out of 10 innovation leaders will have a presence in Silicon Valley in 2019, while 5 out of 10 in Israel.
- More corporates are abandoning/downsizing their accelerator programs (down from 69% to 60%).
- Investment and acquisitions are strategic options prevalently used to leverage successful commercial engagements. Only 50% of innovation leaders are using the M&A channel, while 90% are planning to invest into startups.
Mind the Bridge and Nesta also investigated the main barriers that typically hinder startup-corporate collaboration:
- Based on the discussions with the heads of innovation and senior execs, the growth of open innovation is not going to be impacted either by the current economic climate nor by the political uncertainty.
- Definitively more troublesome are the corporate culture of risk aversion and the internal processes that are the main reported obstacles to innovation.
- Another key barrier to implementation is the lack of internal resources to support startups. Open innovation units are typically small and not generally able to manage the growth of open innovation activities.
- That’s why innovation leaders are evolving to startup-scouting outsourcing models, while focusing their resources on internal implementation.
“Open innovation is now about to become the dominant trend for the coming years. Neither the current economic climate nor the political uncertainty are going to impact the growth of open innovation”– commented Alberto Onetti, Chairman of Mind the Bridge – “All the corporate innovation leaders have definitively moved into open innovation that has now full top level buy-in. The main obstacles are mostly on the execution side and inside the corporations. Corporate culture of risk aversion and internal processes may slow down corporate-startup engagements and hinder the results achievable on this front. Another barrier is the size of open innovation units that are still too small compared to the range and growth of activities to be performed. The issue for corporates is no longer to find startups, rather to effectively (and timely) implement their solutions. That’s why more and more corporates are outsourcing startup-scouting in order to focus on internal implementation.”