By Rob Starr, Big4.com Content Manager
Capgemini Consulting and Altimeter have released an update to their report from June 2015 detailing how corporations around the world approach innovation and the location of ‘hubs’ where organizations are gathering and building innovation centers. New innovation centers from financial services companies dot the landscape as the industry competes against Fintech startups, with 42% of leading organizations in the industry now having innovation centers, compared to 28% in July 2015. Responses from Jerome Buvat, Global Head of Research at Capgemini.
How have the world’s companies shifted focus of their innovation efforts?
Organizations have realized that the traditional innovation model is expensive and unsustainable. Leading companies spend over $650 billion on innovation every year but 90% of companies consider themselves as slow to market and over 85% of new consumer product launches end up failing. To escape these pitfalls and accelerate innovation, organizations have been establishing innovation centers in major technology hubs to tap into the startup ecosystem. Our latest research suggests that innovation centers are blossoming all over the world. From July 2015 (when the previous research was published) to February 2016, 56 new innovation centers have opened in 20 countries and 11 more centers are planned to open soon.
What are the new top focus areas and why?
The Internet of Things (IoT), Financial Technology (Fintech) and Digital Healthcare are the top three focus areas for new innovation centers. Big Data is no longer a big focus for innovation centers. Only 10% of new innovation centers cite Big Data or Analytics as a focus area compared to 51% in our previous research. Big Data appears to have moved rapidly from experimentation and pilots to mainstream adoption. Most large organizations have at least one instance of big data in production.
How have financial services organizations figured in?
Financial firms have accelerated their innovation quotient remarkably in the last six months
as the industry competes against Fintech startups. Our research shows that 42% of leading financial services organizations now have innovation centers compared to 28% in H1 2015. Between July 2015 and February 2016, financial services experienced the greatest growth in innovation centers (48%), overtaking manufacturing (which grew by 7%) and Consumer Products (which grew by 20%). As the sector is transformed by new technologies, financial services companies including BNP Paribas, Deutsche Bank, JP Morgan, and HSBC have opened new innovation centers.
Can you discuss the concept of ‘innovation centers empire’?
Innovation centers empires are locations of a thriving innovation ecosystem where innovation centers cluster. These locations are a confluence of talent and technology where startups, technology firms, venture capitalists and universities work together to accelerate digital innovation. Silicon Valley still remains the hub of the world’s most dominant innovation empire. Over the last six months, Asia rose rapidly as an innovation center empire with one in three new innovation centers opened located in Asia.
What are the other takeaways from the report?
Asia has emerged as the new innovation powerhouse, with one in three new innovation centers opened having bases in Asia. India has doubled its number of innovation centers from eight to sixteen. Bangalore has risen rapidly as a destination of choice for opening innovation centers and achieved fifth position.
o The top 10 locations for innovation centers represent only 35% of the total number of innovation centers, showing that companies are increasingly looking beyond the established hubs.
o “Partnering with ecosystem” emerged as the key objective of 51% of new innovation centers. In our previous research “gaining access and exposure to latest technologies” was the main mission. This change in focus suggests a shift in how some organizations perceive startups. They now see them as true partners who bring significant value to the table.
What’s in the future?
Launching innovation centers is definitely a must for most organizations and we are expecting more large organizations to go down this route in the near future. However, having an innovation center is not sufficient. The vast majority of those centers fail due to a lack of support of the business or a disconnect with the rest of the organization. Successful companies will use their innovation centers to instil a culture of innovation within their organization.