Removing Obstacles to Corporate-Startup Collaboration

Corporate-startup collaborations are becoming the new normal.

While a few corporates may still be contemplating whether to engage with startups, most leading companies are well underway in their efforts to interact with startups and scale-ups, giving them a strategic role in their innovation agenda.

A recent study from INSEAD and 500 startups found out 68 per cent of the top 100 companies from the Forbes Global 500 are engaging in some shape or form with startups today. This data is not surprising, and closely reflects findings already reported in our previous study, Winning Together, about the growth of corporate-startup collaboration.

For example, one in three European accelerators are now run or supported by corporates. (OpenAxel has created a very nice tool to find corporate accelerators in Europe). Research from CB insights also reveals that numbers of corporate venturing units have more than doubled since 2011.

Why are corporates engaging more actively with small, innovative businesses?

Simply put, large firms realise they need to find ways to respond quickly to the pace of technological change and the rapid emergence of new business models, which are driven particularly by digital technology. Increasingly, the ability to partner with such firms is a source of competitive advantage.

As Tomas Hedenborg (Group CEO of Fastems and President of Orgalime, the European Engineering Industries Association) summarised succinctly: “Digitisation requires a new type of agility from existing players”.

Equally, large firms can play a vital supporting role in the startup’s journey.

Enlisting customers is the key for revenue and growth for startups and scale-ups, and partnering with corporates may guarantee initial revenues, privileged access to resources, reputational enhancement, and access to distribution channels and knowledge of specific industries. Corporates may also play the role of investor and, eventually, acquirer.

However, effective collaboration is not easy.

Corporates and startups differ fundamentally not only in size, but also in their culture, working speed, structural makeup and internal procedures. These differences give rise to numerous barriers which can kill a relationship (and often the small firm itself).

In order to understand and hence overcome these barriers, Nesta and the Startup Europe Partnership, in collaboration with the Scale-up Institute, have pooled their knowledge and resources. The result is our new report, ‘Scaling Together’.

This new report explains where problems most commonly arise and how obstacles can occur despite the best intentions. It concludes with practical tips for large firms, startups, scaleups and policymakers about how to promote faster and more effective collaboration.

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