Turning open innovation into practice: trends in European corporates

Abstract

PurposeThe purpose of this paper is to present an overview of the current practices in “corporate-startup collaboration” and “Open Innovation” (OI) in Europe. OI has increasingly become mainstream. A growing number of European corporates are adopting OI approaches to innovate and benefit from a more agile business environment. As Henry Chesbrough – the father of OI – finds out, there is “no single best model for engagement”. It highly depends on the goals that companies want to achieve. Models and approaches of corporate-startup collaboration are continuously evolving. A study of the variety of their effective-implementations in a real business context is therefore beneficial.Design/methodology/approachFor the purpose of this research, the authors analyzed the European corporates that are considered as “innovation leaders” according to “SEP Europe’s Corporate Startup Stars” annual ranking. According to experts’ evaluations, these companies represent the most advanced case studies in open innovation. The paper analyses the experience of 31 European large corporates implementing effective corporate-startup collaboration. The research approach is exploratory and descriptive.FindingsBy adopting a practitioner-oriented perspective, the authors contribute to shed new light on how European corporates adopt OI and internalize arising innovations across organizational boundaries. Six key areas of OI activities have been identified and compared based on required resources’ commitment. Nearly all of the corporates have implemented low-commitment strategies such as organizing one-off startup events and/or sharing free resources with startups. By contrast, only a limited number of corporates engaged actively through acquisitions (M&A), which requires the highest level of commitment. Startup procurement and investments seem to be the most effective approaches to startup-corporate collaboration, while corporate accelerators and innovation outposts are adopted by only nearly half of the companies considered.Research limitations/implicationsAlthough the research is not a comprehensive survey, it is useful to identify current and future trends of successful corporate-startup collaboration as well as best practices by European leading companies working at the forefront of OI.Practical implicationsThis study provides evidence of the main trends in corporate-startup collaborations, both opening up their innovation processes for mutual benefits. The results have important implications both for corporates and policy makers since the study also highlights the main barriers that hinder successful corporate-startup collaborations. Although many of the analyzed corporates report to have introduced “startup-friendly procedures” – including shortening payments times, simplification of vendor registration and qualification process – the vast majority of companies still need to be educated about the opportunities and benefits arising from Open Innovation (OI). This is particularly true for mid-size companies and small and medium-sized companies that based on some preliminary evidences have not yet fully engaged in open innovation due to limited resources and lack of ability to understand the disruption threats posed by recent technology and market evolution.Originality/valueTo date, there is little evidence on current practices of “Open Innovation” and “corporate-startup collaboration” in Europe. Only recently, large European corporations have concretely started to engage with startups. This paper attempts to shed new light on this so-far under-explored issue.