The DEEP Centre is pleased to announce that it has launched an ambitious new research program to study the evolution of corporate innovation partnerships with startups, business accelerators, investment funds and consortia projects in Canada. With the Partners for Prosperity and Innovation project, the DEEP Centre will be identifying key hotspots of activity; speaking to innovation executives about various models for incentivizing, shaping and facilitating corporate innovation partnerships; and providing a comparative look at what Canadian firms can learn from their peers in Europe and the United States.
The project will develop a better understanding of the partnership dynamics and practices that produce mutually beneficial results, as well as the factors that could potentially undermine fruitful relationships between small and large firms. The DEEP Centre will also issue a series of actionable recommendations and convene networking events and workshops to help corporate leaders, entrepreneurs, business accelerators and investors maximize the innovation, growth and shared prosperity that emerges from greater corporate engagement in the Canadian startup ecosystem.
While Canada features some green shoots of corporate innovation activity (especially in financial services), we trail our closest competitors by some distance. In Europe, telecom giants such as Duetsche Telekom, Orange and Telefonica have long-standing corporate acceleration programs. Telefonica, for example, recently expanded its mobile computing accelerator (Wayra) from its base in Spain to academies in 12 countries. Wayra’s mission is to enhance and connect entrepreneurial ecosystems between Latin America and Europe in a way that supports Telefonica’s business objectives by building a pipeline of high potential companies that can become a source of new offerings to customers.
The United States, on the other hand, is home to the most diversified examples of corporate engagement in local startup ecosystems, with corporate accelerators popping up in sectors ranging from food services to health IT to robotics. Companies such as GE, Nike and Pearson have set up their own, independent accelerators, while Disney, Sprint, Qualcomm and others have partnered with third-party operators such as TechStars.
On the plus side, leading funds and innovation hubs in Canada such as Highline Beta, Communitech and MaRS now host resident innovation teams from a number of Canada’s largest firms and offer these corporate partners customized programming and curated access to their networks of supported firms. Companies such as Cenovus, Enbridge, OpenText, RBC and Telus, on the other hand, have established corporate venture funds in order to deepen their engagement with promising Canadian startups.
The bigger picture is less encouraging. Over the last five years, BDC research reveals that large corporations have accounted for less than 10% of VC funding in Canada. Comparing established Canadian corporations to their U.S. peers shows that even on a size-adjusted basis, the largest Canadian corporations contribute approximately 10 times less resources to financing and purchasing VC-backed companies than their peers south of the border.
Given the disparity in corporate venture activity, there is both an opportunity to learn from international best practices and room to further deepen the engagement of Canada’s largest firms in startup ecosystems across the country. A key finding from the DEEP Centre’s recent research into Canada’s network of business incubators and accelerators is that innovation partnerships between small and large firms, while growing quickly in Canada, are comparatively nascent when measured against the partnership activities present in countries such as Germany, the United Kingdom and the United States. With Canada’s investment in a network of superclusters, now is the time to better understand how to structure and sustain winning innovation partnerships.
Leading corporate innovation practitioners agree that successful innovation partnerships require a delicate balancing act to ensure that large firms do not inadvertently suffocate or dampen the very innovative qualities that make their smaller collaborators attractive partners. Defining winning models for structuring innovation partnerships could therefore make a valuable contribution to accelerating such relationships in Canada and beyond. It is also important to identify and highlight the various roles governments can play in facilitating successful corporate innovation partnerships.
Get in touch with the DEEP Centre if you want to learn more.