How startups and corporations engage in open innovation initiatives? : an exploratory study

Abstract

In recent years, the increasing market pressure and constant emergence of new technologies have driven firms to undertake digital transformations to create value and deliver better products or services for customers. Corporations face several challenges when it comes to incorporating new technologies or accelerating and digitizing their well-established processes. By contrast, startups are recognized for their innovation capacity, willingness to take risks, scalable solutions, and agile processes. In the quest for speed and innovation, corporations are engaging with startups to achieve complementary goals. Corporations desire the creative potential of startups, while startups need resources that are plentiful in corporations. Therefore, we identified the increasing interest from corporations and startups to engage with one another through open innovation initiatives. This research explores how open innovation is performed from the perspective of startups and corporations. We identified an opportunity to explore startup-corporation relationships in Porto Digital, one of the most relevant innovation ecosystems in Brazil. In an exploratory study, we conducted semi-structured interviews at eight startups and five corporations to understand the dynamics of their relationships during open innovation initiatives. All eight startups are part of Porto Digital, and the corporations were selected due to their relationships with studied startups. Our results reveal the main drivers, benefits, and challenges involved in the engagement between startups and corporations. Finally, we present a set of recommendations to establish and foster startup-corporation relationships.