Innovation is a team sport in the Fourth Industrial Revolution
Disruptive technologies are forcing large companies to rethink their approach to innovation and R&D.
Over the past few years, digitalization has impacted every business and organization – large and small, private and public. As the pace of change has accelerated, manufacturing and industrial companies have seen their businesses and business models disrupted as new, more nimble players have entered the market.
In response to digital disruption, global corporations are increasingly looking at collaborations with startups and new technology firms as a way to master new technologies, such as artificial intelligence, and to deliver new growth.
Today, many new innovations first achieve scale within the consumer sector before being adopted by industrial companies. For example, augmented and virtual realities (AR & VR), which have long been used in consumer products such as video games, are now being adopted by industry, for instance to simulate a factory so technical issues can be identified before construction starts.
Partnering up with start-ups
Collaborating with start-ups can help large corporations become more agile and increase the speed and effectiveness of bringing new innovations to market. By proactively engaging with external players, corporations can avoid re-inventing the wheel by identifying existing solutions or research projects that are already in the pipeline.
As a pioneering technology leader, ABB has long supported open innovation by searching for technologies and solutions in universities, start-ups and among partner companies. ABB’s corporate research centers have long been collaborating with universities and technology institutes around the world, and many of the company’s business units work with outside partners on technology development.
In addition, the company has a strategic venture capital arm, ABB Technology Ventures (ATV), which scouts for and invests in breakthrough technology companies that are aligned with ABB’s goal to write the future of industrial digitalization. Since 2010, ATV has invested more than $200 million in promising start-ups across a range of sectors including robotics, drones, industrial IoT, artificial intelligence/machine learning, cybersecurity and distributed energy.
Connect, Collaborate and Commercialize
For ABB’s drives business, the technology roadmap has been one of traditional internal R&D. However, digitalization has raised key strategic questions for the business, such as how will lower-cost technologies, such as sensors and chipsets from consumer electronics, impact the industry?
To innovate quickly and to understand what is happening in the market, ABB designed a simple three-step co-innovation approach, called Connect, Collaborate and Commercialize (CCC):
- Connect with potential innovators by setting an innovation challenge to improve the design, use and operation of variable speed drives or find entirely new uses for them.
- Collaborate with shortlisted companies to deliver proof-of-concepts.
- Commercialize successful projects either to improve operational efficiencies within ABB’s own business, or commission a solution to add to ABB’s portfolio.
ABB launched this co-innovation approach two years ago at SLUSH, one of the world’s major start-up events. Six months later, the CCC team entered the collaboration phase on seven projects and, six months after that, it moved into the commercialization phase with two ventures. Both of these ventures worked towards the use of AI in failure root-cause analysis and provided great value to ABB’s business.
Disrupt or be disrupted
In the Fourth Industrial Revolution, companies must either disrupt or be disrupted. To gain and maintain a competitive edge requires rethinking sources of new products, services and business models and adapting to a start-up mentality when it comes to R&D.
Corporations have plenty of options when collaborating with external innovators. ABB’s CCC approach has proven to be a simple yet effective way to engage with relevant start-ups and work with them from initial contact through to commercialization. We believe the CCC approach is a great model of corporate start-up collaboration and complements ATV’s activities at ABB with investments in nearly 30 startups since 2009.
If you’re interested to learn more about our CCC program, download the ‘Co-innovation and the ABB Drives experience’ white paper.