*By Cassio A. Spina
Open innovation or open innovation is the way for projects to be carried out between companies, startups, people and even public bodies in the creation of new products and services. Professor Henry Chesbrough, from Berkeley, is considered one of the first to address the relevance of Open Innovation, in 2003, and to say that this model is the
antithesis of the traditional model based on the in-house R&D department. Open innovation is a new paradigm for knowledge exchange to accelerate innovation by combining internal and external ideas. R&D becomes an open system, as it is recognized that the knowledge, technologies and models that create value for the business are present in the most varied places, especially in startups. Among the advantages of open innovation are the reduction of development time, cost reduction, networking promotion, democratization of access to knowledge, among others.
Corporate Venture is the set of new business development initiatives by established companies, being divided into Corporate Venture Capital, in which the corporation makes minority investments in innovative companies, known as "startups", Corporate Venture Building, in which new businesses, sometimes the result of spin-offs of products or technologies developed within the company.
According to a report prepared by ACE Cortex (2022)[1] Corporate Venture Capital (CVC) is an Open Innovation tool that is available to large companies that need to identify new solutions and update their
business model or operational processes. The CVC is carried out with the support and involvement of other agents in the innovation ecosystem, such as startups and accelerators. It is important to note that CVC differs from
investment processes and traditional business acquisitions, by focusing on innovative companies.
A study by EY, Endeavor Brasil and Insper (2018) highlights that CVC involves the deliberate search for new ideas, knowledge and practices beyond the company's borders. On the one hand, large companies benefit
partnerships, as they have access to the latest technologies and new business models that could not be developed internally in a timely manner. The R&D team may be small or may have other demands for innovations from
short term. Ideas need to be aired. On the other hand, “entrepreneurs, in turn, acquire easier access to the market and resources, in addition to sales opportunities and access to the value chain of the large company. If the engagement
between entrepreneur and company is successful, both reduce their vulnerabilities and increase their competitive advantages”[2].
With digital transformation at an exponential pace, corporations need to adopt new methods to innovate and open innovation and Corporate Venture has been strengthened as a strategy, especially for companies that are
open to change and who recognize that they need to improve their performance in the area of innovation to remain profitable and competitive.
The success of open innovation and Corporate Venture initiatives depends on a set of factors that range from a well-structured strategic vision of innovation, to the preparation and training of the company's employees,
often requiring a change of cultural paradigms that allow the acceptance of failures during the process, associated with continuous learning I strongly recommend to all organizations that intend to get involved in these
activities, which first deepen their understanding of these topics, knowing the experience of other companies, for that purpose I invite you to participate in the ABES CONFERENCE 2022 on 09/19/2022, where I will have the pleasure of mediating the panel "Open Innovation and Corporate Venture" with the participation of leading innovation leaders in the market sharing their experience.
*Cassio A. Spina, Leader of the Startup Committees of ABES – Brazilian Association of Software Companies, holds a degree in Electronic Engineering from Escola Politécnica da USP, working for more than 10 years as an angel investor and advisor/counselor of companies in Innovation , Corporate Venture, Investment and M&A. is the founder of angels of
Brazil and Senior Director of ACE Cortex; author of the books"Angel Investor – Practical Guide for Entrepreneurs and Investors” and “Tips and Secrets for Entrepreneurs”.
[1] ACE Cortex, Report on Corporate Venture Capital (CVC) Available at Link<https://urldefense.com/v3/__https://docsend.com/view/k3k7bckxs55a45t9__
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APux-X9xiCbFzN0VRmsDncQjvFJpyU-ftg$>
[2] EY, ENDEAVOR & INSPER. Corporate Venturing: Challenges and opportunities in the
Brazil (2018). Available in Link. Accessed on May 6, 2022.
*Cassio A. Spina, leader of the ABES Startups Committee
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