The Foundations of Corporate Innovation in the Digital Age

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How Can Corporations Manage Innovation in the Digital Era? We summarize our findings through three questions that are key to innovation in a digital world.

The need to adopt digital technologies is forcing companies to re-think their approach to corporate innovation. Digital technologies are providing increasing opportunities for firms to capture new markets and unseat incumbents.

Small firms are leveraging resources disproportionate to their size (e.g. through cloud computing) and benefiting from their nimbleness, heightening the disruptive threat that they can play. Large corporations, in contrast, are often struggling to adapt to this new innovation cycle – their size is turned from an asset to a liability, resources become burdens, not advantages, and endless streamlining can stifle the experimentation needed to generate innovation. To compete effectively, big companies need to find a way to leverage their scale to generate more and better innovation.

To rigorously navigate through the many practices proposed by strategists and used by innovative companies, Capgemini Invent has partnered with the MIT Initiative on the Digital Economy (IDE) to study how large companies can improve their corporate innovation practices in the digital age.

In this report, the first of a series, we outline the major theories and practices that have been proposed by strategists over the past two decades, and report on a series of interviews with executives in many of the world’s most innovative firms to understand how these theories and practices have been applied.

We summarize our findings through three questions that are key to innovation in a digital world:

1. Innovation Architecture ― How can a firm best balance the exploitation of existing core assets and the exploration of new businesses, and organize effectively around this balance?
2. Innovation Sources ― How can a firm best source innovation, either from within the firm or outside of it?
3. Innovation Capabilities ― What capabilities are critical to support corporate innovation in the digital age?

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Didier Bonnet

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