Professor Ikhlaq Sidhu and I recently started talking about how the interest of corporations in the innovations created by startups is leading to changes in corporate R&D models, an area he has been studying for some time. As we continued our conversations we felt that it will be important to start publishing some of our thoughts. This is the first of what we hope to be a series on posts on how startup innovation is impacting corporate R&D models. Please also see.
The World of Innovation Has Changed
A great deal has changed in corporate innovation since the days of Bell Labs and Xerox PARC. While these models of advanced work led to so many innovations and created tremendous broad economic value, though not always to the lab’s corporate owner, it is clear that large scale, insulated corporate research is no longer the most common model for entering new markets or developing technologies of the future. Even Alphabet is re-evaluating the mission of Google X.
What has changed? For most companies, open innovation and new venture acquisitions have become extensions of the firm’s advanced R&D portfolio. At the same time entrepreneurs and their investors have become much more effective and skilled at efficiently creating new startups and bringing technology and business model innovations to market. And finally, a significant fraction of University lab work has now evolved from the traditional “publish or perish” model to one that is today closer to demonstration, design-oriented, and more applied than ever before.
All of these changes are now converge towards a new model for creating and managing portfolios of innovation.