Corporations Fail In Internal Innovation And Work Better With Startups
88 percent of large companies in German-speaking countries are already working with startups. 98 percent want to do that in the future. This reads a recent study by the Viennese consulting company Pioneers, in which 104 large companies in Germany, Austria, and Switzerland were interviewed on the subject of innovation.
One of the most unexpected conclusions is that cooperation with startups often works better than with other large companies. More than three-quarters of the companies have already tried this and almost half of them have failed. “We assume that fear of competition plays a major role,” explains study author Antonia Frizberg, who works for Pioneers as an Innovation Consultant. The innovation works just as badly on its own. “Intrapreneurship” projects, i.e. innovative ideas of one’s own employees, fail in 47 percent of the cases due to internal resistance. “Our experience shows that above all the middle management is very risk-averse,” says Anton Schilling, who leads the consulting branch of Pioneers.
Almost half do not find any corporate partners
However, the difficulties with other corporate companies are already starting before any cooperation has even begun. 47 percent of the companies did not even find a suitable corporate partner with whom they can jointly develop products, which was stated as the main reason for such cooperation.
Another critical factor in the cooperation between corporates is the protection of intellectual property. Nevertheless, Pioneers sees a certain trend towards such collaborations. “Corporate Partnerships are nothing new, what has changed is the way it happens,” explains Frizberg. One example is coworking spaces in which individual employees often sit together with employees from other companies.
Startup cooperation: different result, yet satisfying
According to the study, collaboration with startups has worked best for innovation projects so far. That’s why most companies work together with startups to develop new, innovative products together. However, 65 percent of respondents said that this result has not yet been achieved. Most commonly, the collaboration brings process innovation and access to new market segments.
Satisfaction with these results is high. More than 90 percent have successfully implemented at least one project in such a partnership. “We have found that the expectations of working with startups are usually exceeded – especially in terms of corporate culture,” says Frizberg. For the big company, the result is usually a transfer of knowledge rather than a financial advantage.
Pitch events and hackathons
The way to becoming a startup partner is via external consultants or programs in almost three quarters of the cases. In general, the satisfaction in these cases is also greater, say the authors of the study. For the first contact and the selection of suitable startups, the most common channel are events like pitching competitions or hackathons. In the next step, about 70 percent of the respondents rely on the financing of a proof-of-concept and often give startups access to data and customers. After all, 41 percent of the surveyed companies offer accelerator programs for up to twelve months.
All of these measures are successful when the expectations of cooperation have been clearly defined (63%) and the company’s management is involved in the process (53%).
Most companies that are particularly successful in innovation processes rely on a variety of programs, according to the study authors. Magna Steyr is particularly strong in intrapreneurship, Raiffeisen Bank International (RBI) is very successful in working with startups and, for example, has developed a commercial register for checking creditworthiness with kompany. In autumn, when the study on the innovation landscape will be published, Pioneers also wants to present “innovation heroes” that one can learn from.