Innovation ecosystems extend beyond startups to research and expert networks, which provide a great pipeline for futuristic and disruptive startups. Some examples include Vanderbilt University in Nashville, Ohio University, and Oregon State University, all of which support everything from technology development and commercialization to sustainability and entrepreneurship. Of course, the expected players are taking part as well: MIT is currently partnering with more than 700 companies (including Boeing, DuPont, Ford and Google) on innovation projects, while Stanford University actively solicits the engineering industry to help solve real-world problems. Ajay Bhaskar of Wipro provides three steps to tap into a powerful innovation engine.
Traditionally, enterprises have relied on large technology partners who provide systems, software, and professional services as relevant solutions to their needs. Such partnerships are critical because they allow companies to leverage valuable expertise, and enterprises will increasingly lean on a network of many different stakeholders for all kinds of purposes — including as a source of innovation.
As the pace of innovation and disruption increases, enterprises are beset by competition on all sides. Today, a groundbreaking startup like Uber or Airbnb can redefine an entire industry virtually overnight, and larger, well-established enterprises must defend their positions and intellectual property by learning how to create their own innovation ecosystems. It’s no easy task for large, lumbering organizations, but the very survival of the enterprise may depend on it.
Capitalizing on an Effective Ecosystem
Innovation ecosystems can offer profound benefits in almost any industry, but they have the biggest impact in the sectors that move at the quickest pace. Take cybersecurity, where there’s a 24/7 arms race between hackers and the companies they seek to steal from. In most of the recent cyberattacks in the U.S., companies and even local governments have had little choice but to pay ransoms so they can resume their operations as quickly as possible. While solutions and technologies exist to combat this persistent threat, many of them are fast-innovating and disruptive startups.
Artificial intelligence is another field in which rapid evolution makes innovation ecosystems essential. Governments around the globe are levying fines against financial institutions for failing to detect usage of their systems by human traffickers, arms dealers, drug dealers, and terrorist groups. And despite an extensive market for compliance solutions, banks continue to run afoul of the rules.
In Europe, for example, banks spend $20 billion on anti-money laundering (AML) measures each year but 90% of European banks were fined between 2009 and 2019. Banks with an effective innovation ecosystem can tap into the most recent developments in AI and effectively apply the technology to AML initiatives. With better solutions helping an institution incur fewer fines, it can gain a serious edge over the competition.
Innovation ecosystems extend beyond startups to research and expert networks, which provide a great pipeline for futuristic and disruptive startups. Some examples of these coming out of universities and research labs are Vanderbilt University in Nashville, Ohio University and Oregon State University, all of which support everything from technology development and commercialization to sustainability and entrepreneurship. Of course, the expected players are taking part as well: MIT is currently partnering with more than 700 companies (including Boeing, DuPont, Ford, and Google) on innovation projects, while Stanford University actively solicits the engineering industry to help solve real-world problems. The list is long.
The benefits of innovation ecosystems are clear, but creating them doesn’t always come naturally to the enterprise. Leaders at large companies often have reservations about engaging smaller organizations like startups that lack a proven track record and financial security. To overcome the most common obstacles and tap into a powerful innovation engine, follow these three steps:
- Look for partners that have the innovation ecosystem agenda as a key priority.
Enterprises work with countless partners, and some of them are well-equipped to play a key role in sourcing innovation. When an enterprise uses a partner that prioritizes an innovation ecosystem agenda, they gain access to all of the knowledge and innovation networks of that partner. With this in mind, the presence of mature innovation ecosystems should be a key factor when vetting potential partners for a wide variety of services.
- Access cutting-edge solutions through corporate venture arms.
Many enterprises have venture arms that invest in startups as strategic investors, but focusing specifically on areas very close to the company can help bring that innovation into the core businesses and platforms that the enterprise is building. These efforts are often transformational because they can yield new value for customers in far less time and because the approach has been validated over and over in industries including technology and finance. A quicker approach for enterprises is to partner with firms that have active corporate ventures arms with the objective of bringing cutting-edge solutions to enterprises — leveraging the best of both the partner and the startup.
- Look for ways to form partnerships with research networks.
Major innovations (especially in areas where problems are large and complex) are being made in the labs of universities and research institutes around the world, and they could also benefit from an enterprise partner who would bring the client problem statement and the data necessary to understand the problem better. When the research team comes up with a new approach, the enterprise or client can do a proof of concept and send real feedback to the research team that helps them refine and triangulate to a solution working with the partner and enterprise.
Ideas and innovations are like living organisms, and they need the right ecosystem to grow and flourish. When an enterprise populates the landscape with experienced partners, industry experts, academics, researchers, and more, it creates an environment where innovation can thrive, benefiting both the company and its customers in countless ways.
Written by Ajay Bhaskar.
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