While we talk about collaboration as a way of accelerating the innovation cycle, the truth is that most innovation partnerships are simply two parties working together for a mutually beneficial outcome. As most companies now are looking to innovate, one company relies on another, and if both perform better because of the input of the other, both will grow, bringing further innovation opportunities and further growth to both the organizations in developing their businesses.
Strong partnerships are essential for successful innovation. These partnerships are beneficial for both parties as they both move forward, creating growth in their companies in terms adding revenues and increasing the customer value chain as the relationship progresses.
Collaboration is a competitive advantage: With the distributed nature of knowledge, especially in high-tech & digital sectors, successful innovation strategies are increasingly determined by the ability to establish; and maintain successful collaboration rather than pursuing innovation activities in isolation.
Different types of Partnerships can be formed when it comes to building great innovation strategies. Here are the most common ones:
The easiest and the best way to build a successful innovation strategy is to interact with startups - which are the most innovative and entrepreneurial organizations in today’s climate. But it’s not just about acquisitions. The best strategies include reshaping the current organizational culture to be more innovative across teams and the organization and working towards long-term value add back into the company.
Partnerships between technology start-ups and large corporates are vital for fostering innovation in Tanzania. It can benefit both sides, helping corporates enter and create new markets and start-ups to develop their products and scale.
With innovation being the key driver of long-term success, working with startups allows corporations to develop and test their new technologies and solutions with fewer costs and risks to their core operations.
It's about win-win partnerships. It is no longer 'us' vs. 'them' between startups and corporates. Mutually beneficial partnerships between startups and corporates seek to solve business-specific problems quicker or at a lower risk and rejuvenate corporate culture by invoking an entrepreneurial mindset.
Internal and external incubator or accelerator programs are effective in optimizing early-stage interactions between corporates and startups. This offers corporates opportunities to explore new technologies and business models at an earlier stage. Corporates can be an ideal target customer for startups as they have enough people, budget, and opportunity to scale. Such an approach allows the startup to achieve sustainable growth independently from scarce venture capital.
“Given the growth of the Innovation Ecosystem in Tanzania, we have so many disruptive innovations coming up, big corporations have started believing in Innovation and are looking for ways to dive in and be part of the digital world, Smart Lab has seen the need to emphasize on Corporate-startup partnerships through all means possible, a good example being through Accelerators”. says Isaack Shayo, The Senior Project Associate at Smart Lab who manages The Vodacom Accelerator Program.
“The Vodacom Accelerator Program was launched with the aim of helping early stage and growth-stage technology start-ups become profitable and revenue generating businesses.” said Vodacom's Digital and Value Added Services Director, Nguvu Kamando.
Ultimately, it is worth the effort if partnerships between corporates and startups come together as just - partners rather than a quick one-off transaction. More often than not, there is a lot more to be learned and developed jointly from both sides.
Innovation is on the agenda for most prominent corporations. Executives are aware that innovation should be in the organization’s DNA to be competitive, survive the long game, and most importantly, bring the best class solutions to customers. However, a traditional corporate infrastructure can often be a double-edged sword for innovations – while it provides the necessary financial resources and support for groundbreaking ideas, the ever-growing corporate structure and bureaucracy could hinder the development of breakthrough projects.
Our mindset has become very much centered around what value we can bring to our potential partners instead of what’s in it for us, which has made all the difference. It has been one of the most critical learnings for the Hub since it has enabled us to build meaningful relationships with external partners through having commitment to long-term success. Our team feels a sense of empowerment when we spend quality time and resources helping start-ups and external partners within the local ecosystem achieve their own goals. We trust the process and recognize that this work will be well worth it in the long run. Partnerships in this field are most often born from a mutual passion for innovation behind it all, so it’s essential to ensure that this is a primary focus for both partners.
While mobile operators have been among the frontrunners in corporate partnerships, not only playing a role in enabling the ICT infrastructure upon which digital services have been implemented but also investing in tailored programs over the last couple of years. Large tech companies are also supporting the innovation ecosystem by establishing a physical presence.
Notably, more traditional corporations such as Banks have also entered the game by supporting different ecosystem innovation projects.
Although this type of partnership may not specifically target startups only, training programs and boot camps are increasingly becoming part of the tech scene all across the continent that these Innovation Hubs are providing for the corporates.
Why Do Partnerships Make Sense
Corporates may discover value in increasing revenues and margins in their core businesses and expanding to emerging business fields.
Start-ups tend to innovate closer to customer needs as they are not as standard process-driven as established corporates. They can adapt and customize solutions more efficiently, allowing the corporate to serve its customers better.
Nevertheless, there is a need to create a collaborative agenda built on shared interests, which have been the critical rationales behind the significant efforts towards hub consolidation across the continent, with ecosystem builders from all over the country calling for better cooperation and dialogue within and across countries.
Corporations need to become aware of market shifts caused by new technologies or innovations in their core or adjacent business fields.