Innovation: it’s not what you know but who you know

The second report in Telstra’s global research series, Connecting Companies: Strategic Partnerships for the Digital Age, found companies driving innovation today are increasingly relying on partnerships rather than traditional in-house R&D or acquisition strategies.

The Connecting Companies research found the primary motivation of digital partnerships is to develop new capabilities that serve the ‘always on’ customer including the mobile-first customers of the rising middle classes in Asia.  The research also showed:

·     We are in an era of the “co-corporation”, with 53 per cent of respondents believing that companies will have to be part of a network to maximise technology trends in the future

·     Fifty per cent of executives believe their digital partnerships will result in a change to their business model

·     Forty-four per cent of respondents took the view that “companies going it alone will soon be a thing of the past”

·     Half of those surveyed believe their digital partnerships have already proven their value “beyond doubt” 

·     Six in 10 surveyed say they expect their partnerships will generate at least one tenth of their revenue over the next 12 months

Martijn Blanken, Group Managing Director, Telstra Global Enterprise and Services said the research confirms that across multiple industries the pace of technology change is so great, that to keep up, most successful global businesses are pursuing strategies based on the power of many.

“I’m not suggesting that the age of in-house R&D and product development is dead, but in many industries you just can’t go it alone anymore.  Whether it is the Indian conglomerate Tech Mahindra’s strategic partnership with Cisco on the Internet of Things, or investments in start-ups like Telstra is making through our muru-D accelerator and Ventures Group, partnerships have become a key business strategy,” said Mr Blanken.

“It doesn’t always come easily, it’s natural for a business to want to compete rather than collaborate, but to succeed in this environment requires a mindset that is open to experimentation.  As the EIU report says, this can mean being open to making multiple bets on big technologies, playing the field and being prepared to potentially exit quickly if things aren’t working.

“Interestingly, the research reveals some regional disparities. The majority of respondents in fast growth economies like India, China and Indonesia say their partnerships are driven by the desire to either expand into new markets.

“In contrast, European and North American respondents are more interested in developing new capabilities in products and services and showing differentiation to existing segments, of course both approaches open the door for some fantastic collaboration opportunities,” he added.