Big Companies Need Small Companies in their Open Innovation Ecosystems | Innovation & Institutions, Will it Blend? |

Matching to Innovate:  Small companies often are at the leading edge of breakthrough or disruptive innovation, and need the resources the larger company can provide.


This rings so true.  The magic is in the matching the small with the big, so both will benefit.


Excerpted:  Breakthrough innovation – that is, innovation with potential to be a real game changer – can be exceedingly hard to achieve in a large, bureaucratic organization where people work in silos, have their own turf to protect and are wedded to the status quo.

Small companies can take risks that large companies can’t afford to take because the bigger entities have to protect and defend their established core business operations.  (DN:  I have als0 been reading and curating examples of larger companies cannibalizing their core operations to fund new ventures & innovations, so the examples are out there, especially in the fringes of big company ventures.)


The price of failure for the small, agile start-up is significantly less than that of a large corporation. At this level people tend to embrace risk, while the larger companies may have cultures that don’t support risk taking at all.

Smaller companies are often closer to the markets they serve than large corporations are to their markets. As a result, small companies can be effective in helping large companies obtain a better grasp of changing needs within a market and better insights into innovations that might meet those needs. Smaller companies may also have developed ties with sub-markets that corporations have not been able to reach. This again offers more opportunities for innovation.

Via Peter Verschuere