Open innovation 2020: in search of the most profitable start-ups

Open innovation 2020: in search of the most profitable start-ups

Open innovation is evolving. The last report by  Mind The Bridge and Nesta entitled “Open Innovation – Outlook 2020” based on data collected through the interviews made to 36 CIOs and global Heads of Innovation, tries to identify the main changes occurred.

The “open innovation” concept was first introduced in 2003 by the US economist Henry Chesbrough. In his book  “Open Innovation: The New Imperative for Creating and Profiting from Technology” he claimed that “closed innovation”, that is to say the innovation process taking place inside organizations, was no longer enough to compete at a global level, due to the fact that the products life cycle was becoming shorter and shorter. He argued the solution might be opening up to research and external partnerships thus accepting ideas, projects and know-how coming from outside the company, opening up to contributions from start ups, universities and professionals. Which is what open innovation actually brings about (What is open innovation – and why is  everybody claiming to be willing to enforce it ).

Open innovation 3 lives

Over the past two decades open  innovation has lived three different lives. The first, when it was actually born, is known as the marketing era. In that phase, which was almost primeval and absolutely lacking any kind of awareness, businesses committed to communicate their level of innovation to the world rather than actually turn it into a reality . And, ça va sans dire, partnerships were mostly superficial.  

The second phase, which has just ended, was the time of collaborations. Having finally  assimilated the open innovation model, businesses involved internal units to create a dedicated entity devoted to seriously establishing and maintaining partnerships, making investments and takeover operations.

Nowadays, we have finally entered the era of results. The time has come to harvest the financial fruits of the work made in the past. Start-ups investments and takeovers are expected to pay back in  terms of distributed capital and contribute to the achievement of corporate targets: higher efficiency, lower expenses, higher income. From words to facts, indeed, everybody is looking for concrete results and  the most desirable partnerships are those which may have a positive impact on the EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), i.e. the operating gross margin  (What is EBITDA: its meaning, how to calculate it and how to use it ).

Open innovation 4 macro trends for 2020

In this era of results, the 2020 Outlook 2020 has identified 4 main trends:

1. Procurements are getting stronger and stronger

Start ups are mainly involved through such procurements and the majority (96%) of Corporate Startup Stars is going to be reeled in through funded POCs (proof of concept) and pilot projects.
 “Startup studios” are also becoming increasingly popular.

2. Takeovers increase

More and more start-ups are being taken over (80% against 76% of 2019) and investments are increasing, too.

3. Accelerators are slowing down

What in 2019 was just an emerging trend has become a reality in 2020: businesses are reducing or even terminating corporate start-ups accelerators.

4. Hunting for start-ups

All companies have been trying to be at the forefront of the innovation clusters: those who already are have been trying to remain there and the others have been investing in the scouting process thereof.

The main technological hubs in the world are:

The Silicon Valley ( 91% of businesses there are already active, the rest are confident they will be quite soon)

Israel (82% are already there, 9% believe they will get there )

London, Paris, Berlin (82% are already there, 4% have planned to get there )

China (45% present, 23% planning to get there )

India (50% present, 14% planning to get there )

Latin America  (50% present, 14% planning to get there)

Middle East and Africa (“only” 36% è present and 14 planning to get there)

And what about Italy?

Our country has finally assimilated the open innovation concept. Still, practice is another thing …( Open Innovation, Outlook Italy 2020 – Report).

While big companies are active players and have established some startup-corporate partnerships, SMEs are falling behind. And, since these latter are the backbone of our financial structure, this delay may be quite detrimental to our country. Indeed, open innovation works regardless the size of companies and contributes to make businesses more competitive and strategic. It is about time we all hurried up .


What do you believe Italy should do to keep up in terms of innovation? Tweet @agostinellialdo.

To find out more about the  digital world, you may read my latest book entitled: “People Are Media” 

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