Large companies risk losing $1.5 trillion in growth opportunities by not collaborating more with entrepreneurs and startups when developing new ideas, according to study by Accenture. And, they need to do a better job working along with startups, according to the research.
Last month, Wipro invested in US based Vicarious. Wipro aims to apply the startup’s artificial intelligence to automate some functions that are presently handled by engineers.
It is matter of time before the big corporations no longer just fund startups, but instead will look towards partnership to jointly create innovation together.
According to a study, 82 percent of executives from large companies believe that they can learn from startups and entrepreneurs to become digital business. And, believe that revenue from entrepreneurs will raise from 9 percent to 20 percent in 5 years.
The collaboration will not just be restricted to fund a startup innovation, but actively participating in sharing ideas and assets.
But, based on the same study it is also revealed that entrepreneurs don’t believe that large companies truly wants to work with them in equal partnership. Less than one-forth of entrepreneurs think that large companies are truly committed towards supporting growth of the startups.
According to Jitendra Kavathekar, managing director for Accenture’s Open Innovation,
“The journey to open innovation requires large companies to recognize that collaboration cannot continue to be done on their terms, on their premises or just for their benefit,”
He added, “To make a success of digital disruption will require new forms of innovation in which multiple partners collaborate to create, fail and try again in more experimental and entrepreneurial settings.”
Entrepreneurs and startups founders, recommends the larger companies to take several steps for collaboration.
- Set a strategy that defines the goals for everyone involved as a way to give their smaller partners confidence that the return on investment and commitments will be stared equally.
- Define the budget in order to ensure that the ideas can be scaled up and not discontinued after pilot phase.
- Build a entrepreneurial culture, by encouraging employees to launch their own startups.
- Create a larger range of financing models, from public grants to crowdfunding, as a way to meet the changing needs of entrepreneurs at different stages.
- Create a collaborative partership rather than focussed on one group
The study was based on the survey that was done with 1,002 entrepreneurs and 1,020 executives at large companies. As well as in-depth interview with 20 executives at companies.