Corporate accelerator programs play a major role in the development and execution of new ideas. They provide mentorship, technical product assistance, business development introductions, recruiting support, fundraising advice, and (sometimes) capital investment. As a result, many new options become available on a regular basis. According to the Global Accelerator Report for 2016, corporate accelerator programs have produced a global worldwide investment of over 206.740 million dollars in 11,305 startups.
Corporate accelerator programs have produced a global worldwide investment of over 206.740 million dollars in 11,305 startups.
The term “accelerate” refers to speeding up movement (in this case the growth of a brand new business). Accelerator programs enhance and move forward the learning and execution process. There are different types of accelerators out there, each program created for the specific purpose of encouraging innovation.
Each program leverages a specific business model, and this is where the differences stem from. Let’s take a look at three of the most prominent types of corporate accelerator programs entrepreneurs can make use of today.
Open Innovation Programs
The term open innovation refers to a business model in which startups are invited to “embed” themselves at the physical location of a large corporation.
Through this partnership, startups are provided with both financial resources and guidance. A large company will thus bring innovation in to benefit from more than just internal research and development.
According to a Cisco survey, new technology has brought down the cost of launching a startup, but it has also caused the shortest lifespan in the history of business. In 1920, the average lifespan of an S&P 500 company was 67 years. Today, this number has been brought down to 15 years.
Large organizations have responded to this new trend by ditching standard research and development practices to an extent. Open innovation programs provide such an opportunity that’s mutually beneficial. This approach allows for genuine breakthrough innovation, which is why it happens to be particularly prominent in areas like the pharmaceutical industry.
There are numerous examples of open innovation programs out there.
Samsung, for example, is one of the companies that have embraced open innovation programs. It has partnered up with entities like Mobeam – a company that specializes in the integration of payment systems. The Facebook hackathons are another curious example of open innovation corporate accelerator programs.
External Corporate Accelerator Programs
As the name suggests, this program has companies partnering up with third-party accelerators for the purpose of getting funding. Integration opportunities and collaboration could be provided in return.
Instead of being managed by employees, external accelerators are run by third parties, hence the title. Corporate innovation professionals are given the task to embed themselves in an accelerator office for the purpose of fostering the necessary relationships with innovative startups.
One of the major benefits of such programs is relatively easy access to the startup community. Marketing within the corporate partner and a change in professional attitudes towards innovation can also be accomplished via external accelerator programs.
Because of the different characteristics and the perks linked to each type of program, some businesses like Bosch have been known to launch both internal incubators and external accelerator programs (this one in partnership with BMW).
Innovation outposts also classify among the popular corporate accelerator programs. They’re different from external accelerators because they’re managed by employees rather than by third parties.
A dedicated physical office is usually set up in a place of interest for the respective company where innovation takes place. Corporate innovation professionals staff the office, and their primary job is to do market analysis and identify new trends.
Based on the research and the work of these professionals (which could include interactions and partnerships with local startups), innovation programs are introduced into the company’s headquarters.
Companies like Vodafone and Nestle have already opened such innovation outposts in the Silicon Valley. This practice is becoming increasingly popular among Fortune 500 companies because being present where the trends actually occur can lead to massive changes in the direction undertaken by the leadership of a company.
The Silicon Valley isn’t the only viable location for the execution of such accelerator programs, though it’s still the leader. International hotspots like Tel Aviv and Singapore have also appeared on the corporate development map. In the years to come, exports from China to Europe are expected to grow exponentially and affect the markets considered hot. In 2015, bilateral trade between the EU and China stood at 580 billion euro, and the number will grow even further as new areas of economic interaction are explored.
According to a report called The Innovation Game, companies have continuously struggled with innovation because of traditional research and development processes. As a result, innovation outposts are already pretty popular and they’ll continue growing in importance in the years to come. The report from 2015 suggests that at that time, 38 percent of the world’s top 200 companies had already set up innovation centers outside their corporate headquarters.
These three examples of corporate accelerator programs show one thing – there isn’t a universal approach towards fostering innovation and activating new business development opportunities. Some companies will employ one program at a time, others will launch multiple accelerators to address specific goals simultaneously.
One thing is certain – most of these programs rely on an external source of innovation. Thus, an effective corporate accelerator program is heavily dependent on the availability of a flexible corporate framework and organizational alignment.