Innovation has long been seen as a key source of competitive advantage. So opening up your internal innovation process to external partners might sound like a bad idea on the surface. And yet Open Innovation, which does exactly that, is clearly on the rise, judging by a report Sopra Steria published last year. Especially in the Benelux, corporate companies seem to have acquired a taste for collaborating with startups to achieve their innovation goals.
Every crisis yields opportunities. Or as the saying goes: “Never let a good crisis go to waste.” The reality is, however, that in economically difficult times, companies tend to become more risk averse and innovation budgets inevitably come under pressure. This was no different during and after the COVID-19 pandemic.
No longer niche
But this time around something had changed, apparently. Something fundamental, in fact: Open Innovation, once a relatively niche phenomenon, had rapidly become part of the mainstream, with almost three in four (72%) European corporates running collaboration projects with startups, according to the findings of our study. That study, produced in partnership with market research firm Ipsos and top graduate business school INSEAD, also showed that no less than two-thirds (67%) of the corporates we surveyed rated startup collaboration as important or even mission-critical to their organisation’s strategy,
All of these companies seem to have come to the same conclusion as Nathan Furr, Professor of Strategy at INSEAD: “When times are tough, the big mistake is to close up, when in fact, reaching out is the best way to survive and prosper.” According to Furr, “One of the best ways to supercharge innovation is to reach out, through Open Innovation, to others – people, startups, companies – who have ideas.”
Rapid uptake
If there’s one key finding to take away from our report, it is indeed that European companies’ knowledge of and attitude towards Open Innovation have quickly matured. At the time of our survey (September 2022) four out of five (80%) of corporate businesses in the Benelux expressed an interest in launching collaborations with startups in the next 18 months – the second-highest number in Europe. These businesses identified blockchain technology as the area of greatest interest to them. At a broader European level, sustainability, artificial intelligence (AI) and cybersecurity were the top three topics businesses aimed to explore in collaboration with startups.
You might wonder what explains this rapid uptake of Open Innovation projects. As usual, it stems from a combination of factors, one of which is the higher awareness of Open Innovation models in today’s business world. Another is a general surge in demand for innovation combined with greater familiarity with collaboration tools since the pandemic normalised remote working.
Clear benefits
As explanations go, however, nothing beats the clear business benefits that Open Innovation offers. By collaborating with startups, companies get access to innovative technology that allows them to identify new market opportunities and leverage their knowledge beyond their own organisation’s boundaries. This strategic approach to innovation significantly reduces risks, shortens the time to market for new products or technologies, and generally optimises internal processes, making them more fluid and creative.
All of this goes a long way to explaining why the corporate appetite for Open Innovation has surged in recent years. This is particularly remarkable in the Benelux countries, where 75% of the corporates we surveyed had effectively launched collaborations with startups during or since the pandemic. Even more remarkable, perhaps, is the fact that 80% of Benelux corporates have already collaborated with startups as an integral part of their innovation strategy – again: the second-highest number in Europe. No mean feat, I am proud to say!
Curious to know more? Download our full ‘Open Innovation Report 2023’!