Capgemini Research Institute’s latest report has revealed that three of the top five cities where organisations plan to focus investments in Open Innovation Labs in the next two years are in Europe.
Three-quarters (75%) of organisations state that open innovation is critical to addressing complex challenges in today’s business landscape. According to Capgemini Research Institute’s latest report, The Power of Open Minds – How open innovation offers benefits for all, 71% of organisations say that they plan to increase their investment in open innovation practices in the next two years, while 28% intend to maintain their investment at its current level.
Open innovation widely recognised as critical in solving key business challenges
Navigating today’s complex business ecosystem requires a collaborative approach and an ecosystem of partners. The report finds that businesses adopt open innovation in order to improve existing offerings and develop new ones, create new business models and ensure more efficient spending in R&D.
The report also finds that 83% of organisations see open innovation as a critical success factor for addressing sustainability goals. However, this is a recent trend for companies, with over two-thirds (68%) of them only starting to focus on open innovation for sustainability purposes in the past two years. Those that have leveraged open innovation are already reaping benefits – with 63% citing improvements in environmental sustainability indicators and 55% citing improvements in social sustainability indicators because of their open innovation initiatives.
In addition, the report finds that over 60% of organisations are experiencing improved operational efficiency, increased agility and stronger revenue thanks to open innovation. Over half (55%) also report that it has led to increased speed of innovation and 62% say it has led to greater employee agility and adaptability.
Startups and other partners are more satisfied with the outcomes of open innovation than large organisations
Three-quarters of startups, academics and non-profits view open innovation outcomes as positive compared to 53% of large organisations. The research also shows that large organisations have been unable to leverage new sources of innovation effectively. They say they are able to derive better outcomes when working with traditional partners such as customers and suppliers, rather than non-traditional partners such as universities, industry consortiums, companies in other industries, government bodies and non-profits.
Those that are taking a bolder approach to innovation and are willing to apply open innovation practices to potentially riskier or new business areas are reaping benefits. The reports finds that only 22% of organisations have described their outcomes from open innovation as ‘good’ or ‘excellent’. These ‘leaders’ are also more willing to collaborate with innovation partners such as startups and other non-traditional partners.
“As businesses make the dual transition towards a digital and sustainable economy, nurturing a culture of open innovation is a critical success factor for organisations,” said Pascal Brier, Chief Innovation Officer at Capgemini and Member of the Group Executive Committee. “The research shows that although companies see open innovation as pivotal for sustainability and continue to step up investments in open innovation, many are still not satisfied with its current outcomes. To address this, large companies need to expand their ecosystem to incorporate a more varied set of partners that will enable a bolder approach to innovation in order to see greater business value in the long run.”
Three of the top five cities where organisations plan to invest in Open Innovation Labs are in Europe
The report finds that organisations are adopting a variety of approaches to engage in open innovation – such as corporate accelerators and incubators, corporate venture capital, crowdsourcing and open innovation labs. Amongst these, 71% of the organisations surveyed plan to increase investment in open innovation in the next two years.
- New York emerged as the top ranked city for investment in Open Innovation Labs, today and in the next two years, followed by London.
- Paris is expected to move up three ranks, reaching the third spot, overtaking San Francisco (set to become number four in the next two years).
- Overall, three of the top five cities where organisations plan to focus investments in Open Innovation Labs in the next two years are in Europe (these include London, Paris and Berlin).
- Organisations are diversifying their geographical approach to open innovation labs over the next two years, with Boston, Melbourne, Toronto, Beijing and the Guangdong-Honk Kong-Macao Greater Bay Area (GBA), all set to rise in the rankings.
The report also finds that quality of life/city infrastructure, access to technology partners and to customers and suppliers are the primary factors for companies when deciding which locations to invest in open innovation labs.
