Harnessing the Power of Entrepreneurs to Open Innovation

Jitendra Kavathekar: Managing Director, Accenture Open Innovation Madhu Vazirani: Thought Leadership Senior Principal, Accenture Research Tuesday September 8, 2015 Harnessing the Power of Entrepreneurs to Open Innovation

2Copyright © 2015 Accenture All rights reserved. of Fortune 500 companies have disappeared since 2000, mainly due to the disruption of traditional industry models by digital technologies. of revenues of large companies expected to be generated from digital products and services in the next 3 years, up from 16% today (Source: Accenture Research) Markets are being disrupted by digital The last decade saw start-ups and entrepreneurs disrupt traditional markets. In the next ten years, large companies will use digital to disrupt markets themselves.

3Copyright © 2015 Accenture All rights reserved. Large companies and entrepreneurs must learn to collaborate effectively The good news is that large and small companies show every intention of collaborating with multiple parties How important will collaborating with these stakeholders be in driving your innovation & growth in the next 3 years? “82% of large companies say they can learn from entrepreneurs about how to become a digital business” Source: Accenture Research

4Copyright © 2015 Accenture All rights reserved. And both camps see the benefits of working with each other: • Collaboration based revenues at large companies will jump from 9% today to 20% in 5 years • 82% of large companies say they can learn from entrepreneurs about how to become a digital business • 46% feel the need to work with entrepreneurs to be sufficiently innovative

5Copyright © 2015 Accenture All rights reserved. The nature of collaboration must change “How can I create an ecosystem of partners collaborating on equal terms?” “How can I get others to help me do what I already want to do?” From bilateral collaboration done on the terms of large companies, to more open ended collaboration with multiple parties

7Copyright © 2015 Accenture All rights reserved. Ecosystem Innovation: The power of platforms Ecosystem innovation represents a shift to an external mindset in which risks and rewards are shared mutually. It demands greater levels of digital collaboration in a wider ecosystem. “There will be more than 100 new digital industry platforms from non-tech companies by 2016” (IDC) “In 2013, 14 of the top 30 global brands by market capitalization were platform- oriented companies” (MIT)

8Copyright © 2015 Accenture All rights reserved. But large companies and entrepreneurs do not see eye to eye Commitment Entrepreneurs and startups are four times more likely to say their large company partners lack commitment than corporates are about their smaller collaborators Source: Accenture Research Culture

10Copyright © 2015 Accenture All rights reserved. Eyes on the prize NEXT 5 YEARS: 20% Proportion of large companies’ revenues generated by collaboration with startups/entrepreneurs TODAY: 9% Spillover effects on economic growth

11Copyright © 2015 Accenture All rights reserved. Taking action Large companies • Visibly embrace collaboration top-down • Define and budget for success • Seed an “intrapreneurship” culture Entrepreneurs • Align to the market • Adapt culture • Time it well Governments & policy makers • Develop co-financing models • Incent collaboration between large companies and startups • Create collaboration networks • Encourage a borderless physical world Bridgemakers • Open up access to supply chains • Accelerate the network effect of role models and mentors • Bridge the cultural gap

12Copyright © 2015 Accenture All rights reserved. Accenture Open Innovation As A Service Start-ups • High risk • High charge velocity • Delayed economic value • Seek disruption Global 2000 Companies • Immediate economic value • Low risk • Low change velocity • Look for guided disruption Open Innovation Tech Labs Emerging Technologies Group Growth Platforms Operating Groups Delivery Account Teams Accenture as a bridgemaker

13Copyright © 2015 Accenture All rights reserved. Accenture Open Innovation as a service Discover-Validate Operationalize-ScaleEnvision Define Digital Strategy Rapid business model & technology ideation for digital products, services & experiences Prototype, launch, and manage digital products, services and experiences Future of the Industry Build MVP(s) Identify and implement new digital capabilities, embed as core in the organization Your role in the future Validation (Market, Technology, Organization, Partners) Gap analysis – Technology, Organization, Operations Kick-start Innovation Program – team, funding, mandate, exec sponsorship Develop and execute transformation roadmap and operating model across culture, structure, process and technology Define Innovation Strategy