1、HOW BELGIAN CORPORATIONS COMPARE TO THE FRENCH AND DUTCH ONES IN USING CORPORATE VENTURING The power of entrepreneurs on the road towards open innovation 06.2020 BRUSSELS / BELGIUM 06.2020 BRUSSELS / BELGIUM FAST FACTS (1) structural differences between publicly listed Belgian companies and its larg

2、er French and Dutch counterparts, (2) a different, defensive approach towards new industry challengers, (3) a lack of a clearly defined open innovation strategy. H Part of this disparity can be linked to the different size and corporate structure of CAC40 and AEX25 companies. In 2019, the average ma

3、rket cap of a BEL20 corporation was EUR 15.85bn compared to EUR 32.42bn and EUR 45.81bn1) for companies in the AEX25 and CAC40 respectively. Equally, the median market cap is significantly smaller for BEL20 than for AEX25 and CAC40 companies. Being of larger average size and hence disposing of more

4、substantial resources, French and Dutch corporations are more likely to commit to corporate venturing efforts. Nevertheless, differences in corporate venturing efforts are striking and cannot only be explained by structural discrepancies. In Belgium, many large corporations seem to still have a more

5、 defensive approach towards rising industry challengers. Instead of considering mutually beneficial collaboration models, incumbents largely invest in and acquire We also observe that many corporations have an iterative approach to the dif- ferent corporate venturing models. Often incumbents start c

6、onnecting with start- ups through one-off events to get a first idea of the entrepreneurs potential. Then, they engage more with startups by supporting them in in-house or external incubators and/or later accelerators. Finally, if the startups evolution has been meeting its mentors expectation, the

7、incumbent may launch a commercial part- nership with the startup to jointly expand existing or/and develop new revenue streams. Larger minority or majority investments eventually follow once the collaboration has proven itself fruitful over a longer time. The consumer brands conglomerate Unilever ha

8、s created its own venture unit which has been success- fully following its iterative so-called “Pitch, Pilot, Partner” approach to launch over 150 pilot programs in different verticals with startups since 2014. Until today, the consumer brands giant has been looking into actively scaling at least 30

9、 partnerships that originate from its own venturing unit. Nevertheless, for specific objectives such as selective pending business problems, incumbents choose an isolated venturing model without following an iterative approach. 1) Euronext Factsheets 2019 2/ G / Corporate venturing within BEL20, AEX

10、25 and CAC40 companies 40 CAC40 Limited interaction with start-ups, generally on an opportunistic basis Corporate venturing not/barely part of innovation strategy; limited existing interaction with start-ups generally on an opportunistic basis. Active in at most 1 out of 4 different predefined corpo

11、rate venturing (CV) collaboration models. Moderate integration of corporate venturing Corporate venturing as partial component of innovation strategy; mainly involvement through external business support programs and one other CV collaboration model Active in 2 out of 4 predefined CV collaboration m

12、odels High integration of corporate venturing Corporate venturing as one of the key components of innovation strategy; regular involvement with startups, mostly through a dedicated internal unit Active in at least 3 out of 4 predefined CV collaboration models AEX25 25 BEL20 20 32 (80%) 2 (5%) 6 (15%

13、) 16 (64%) 2 (8%) 7 (28%) 7 (35%) 2 (10%) 11 (55%) Source: Nesta, Secondary research, Roland Berger 1112 Corporate VenturingCorporate VenturingRoland BergerRoland Berger startups either as a protective measure or to realize financial returns. Other incumbents that do invest in other external innovat

14、ion models such as hosting one-off events and sponsoring incubators and accelerators are doing this largely for marketing and branding purposes, instead of embracing the dynamism the cooperation with startups can bring to its business. Furthermore, many large Belgian enterprises still lack a clear c

15、orporate ven- turing strategy and hence, do also not dispose of a dedicated unit to manage and promote corporate venturing efforts across the company. They do not yet have the benefit of a CEO mandate, nor resources to achieve their ambitions. Typically, the resources are limited to discretionary mo

16、ney, often borrowed from other parts of the organization, primarily because they are still in the learning phase. Counterexamples do exist, such as ING and KBC,2 retail banks, for instance, that do have their proper internal venturing arm. Nevertheless, compared with CAC40 and AEX25 companies, the s

17、hare of BEL20 with such a dedicated cor- porate venturing arm is relatively small (c.30% compared to c.40% in CAC40 and AEX25). 2.2 / Corporate venturing is more popular amongst certain industries than others RESEARCH RESULTS Next, we also analyzed the corporate venturing trends amongst industries f

18、or the BEL20, AEX25 and CAC40. There are significant differences between dif- ferent industries in terms of innovation needs, which will trigger different cor- porate venturing dynamics. In our sample of 85 large corporations, cross-country trends emerge. Represented industries can be classified in

19、3 different categories based on average integration of corporate venturing initiatives among its cor- porations: leaders, conformists and laggards. I The result of the industry analysis shows that Aerospace Solvay, with Solvay Ventures, its venture capital entity, managing a fund of EUR 80 m and San

20、ofi, with Sanofi Ventures, which shares its established expertise and capabilities with its portfolio companies. The observed disparities between industries can be explained by two main factors. First, the level of customer orientation of the industry. Second, the inten- sity of the barriers to entr

21、y of the industry. J The first common denominator, driving the need for corporate venturing initiatives within these industries, is the level of customer orientation. The rev- enues of the companies in top scoring industries are usually highly dependent on the customer satisfaction and/or brand perc

22、eption. This interaction with cli- ents is constantly challenged in todays business context. The shift towards dig- ital distribution channels, the rise of new utilization and pricing models, and an increasing importance of social responsibility and production transparency are few of the challenges

23、that incumbents are faced with in todays context. This wave of challenges requires the large corporations to innovate quickly. In doing so, corporate venturing is an ideal solution to quickly integrate the solutions provided by new players. Taking the example of the Aerospace hence corporate venturi

24、ng less preferred as a manner to drive innovation J / Main drivers of differences in corporate venturing efforts between industries 1516 Corporate VenturingCorporate VenturingRoland BergerRoland Berger safeguarded from innovative disruption. Especially, the pharmaceutical indus- try, although labell

25、ed as corporate venturing “laggard”, has been shaken heavily by the rise of biotech startups mushrooming in developed economies over the last couple of years. Young entrepreneurs have started not only to come up with new innovative processes, but to tackle the core of life-science by developing new

26、products and treatments, such as 3D bioprinting (Cellink), cancer and auto- immune disease drugs (Captor Therapeutics) and blindness cures (Sparing Vision), that large pharma corporations have been struggling with for decades. 3/ Time for a different approach in Belgium In a fast-changing competitiv

27、e environment, incumbents need to identify where they are most vulnerable of being disrupted and how they can leverage innova- tion to defend their leading position. In this search, corporations should consider corporate venturing as a useful tool to stay at the edge of progress in their industry. N

28、evertheless, not every corporate venturing model is omni-applicable, and incumbents must first clearly reflect on their strategic objectives pursued by their innovation strategy (reju- venate the corporate culture, attract talent, overcome business challenges or expand respectively create revenue st

29、reams) before selecting the right combi- nation of collaboration model with industry challengers. Hence, a clear selection in collaboration models between corporates and entre- preneurs should be the starting point for successful corporate venturing. K Once the preferred collaboration model is chose

30、n, it is important to make corporate venturing work. Corporates should design and implement an action- able corporate venturing strategy. We identified the three general elements to put in place in the corporation in order to succeed. On top, two Belgium-specific recommendations are presented. GENER

31、AL RECOMMENDATIONS First, a transversal entrepreneurial culture involving employees and custom- ers and giving them responsibility in the innovation process. A rejuvenated and flexible shared corporate mindset builds a promising base to interact and collaborate on different operational levels with d

32、ynamic startups. Generating interactions with the different internal and external parties in order to constantly test new ideas and products is key. This goes hand in hand with a compelling vision and participation by cor- porate leaders who embrace a win-win mindset regarding the positive outcomes

33、of the collaboration, but who also acknowledge this is a learning process for which failure will need to be embraced. Innovation should be included in the top management agenda and the benefits of corporate venturing should be reflected in the corporate governance. Without a clear mandate from senio

34、r executives, the enthusiasm may wane. Second, it is beneficial to set up a dedicated entity for corporate venturing. There should be a flexible corporate governance and structure, including a ded- icated corporate venturing unit with full autonomy. Hence, a clear level of fund- ing with a separate

35、P&L should be put in place for this unit. Although this might not seem interesting nor realistic in the short run for companies which are only at their beginnings with corporate venturing, it is a must for companies conduct- ing corporate venturing more actively. Finally, corporations need to design

36、 and implement an actionable approach. Corporations should be aware beforehand of the great importance of working with a critical mass of startups and to should take this into account. In other words, a continuous evaluation and follow-up of startups and models by estab- lishing KPIs to measure succ

37、ess is important. 1 2 3 K / Recommendations for Belgian companies Design and implement an actionable corporate venturing strategy 1 Engage more with startups and in the earlier maturity stages due to budget limitations of BE corporates compared to NL and FR peers 2 Clearly identify and communicate t

38、he industry challenges towards entrepreneurs accompany them in the solution development process, considering the high barriers to entry in the main BE industries 1 Create a transversal entrepreneurial culture involving employees & customers 2 Create a dedicated corporate venturing unit that manages

39、relations with partner startups and new business opportunities 3 Develop a clear approach with clearly defined steps and KPIs CHOOSE CORPORATE VENTURING MAKE CORPORATE VENTURING WORK We do need innovation within our company How can we propagate innovation across the company? Open vs closed innovatio

40、n. If open innovation, should it be corporate venturing? What strategic objectives are we pursuing with corporate venturing? Rejuvenate corporate culture, attract talent, overcome business challenges, develop new/expand revenue streams. Which collaboration model(s) are we going to use? One-off event

41、s, sharing resources & business support, partnerships or/and investments. Source: Expert interviews, Secondary research, Roland Berger GeneralBelgium-specific 1718 Corporate VenturingCorporate VenturingRoland BergerRoland Berger BELGIUM-SPECIFIC In addition, Belgian corporations need to account for

42、the other critical factors that have been weighing on the intensity of corporate venturing activity within the BEL20 until now, to successfully overhaul their innovation strategy: the smaller average company size of BEL20 compared to the AEX25 and the CAC40 and hence the more limited budget, the mor

43、e defensive approach towards start- ups as well as the specific type of industries within the index. Indeed, corporations in pharma, manufacturing and real estate & construc- tion, representing some of Belgiums main industries, need to promote more actively entrepreneurship (e.g. by launching incuba

44、tor or accelerator programs) to develop solutions that answer todays societys demands. First, considering their smaller size and limited budget, BE corporations need to engage at an earlier maturity state with startups. This will enable cor- porates to build long-term partnerships with the start-ups

45、, enables to integrate disruptive solutions quickly and limits the needed investments. In any case, investments should be adjusted to the budgetary constraints of the corporates, that is why Belgian corporations should (continue to) assess potential gains vs. risks carefully before investing in the

46、start-ups. This can be done optimally if the collaboration has been established in an early maturity stage of the start-up Second, being situated more upstream the value chain (not directly exposed to consumers), Belgian corporates need an external, agile and versatile party, i.e. startups, to foste

47、r industry innovation. Corporations need to communicate clearly about their challenges, and progressively develop a mutual partnership with the most promising solution providers as they mature. Hence, transparency on the activity and the industry-related key topics is important to attract and onboar

48、d successful start-ups. CONCLUSION All in all, there is obviously not one winning approach Our study confirms this by reflecting that the required corporate venturing method depends on the needs of the corporations and that the level of integration of corporate venturing is dependent on multiple fac

49、tors as well. However, if Belgian companies want to stay competitive and mitigate the risks of being disrupted by new entrants, innovation will be key. AUTHORS Pierre Bastien Partner Pierre Bastien Simon Geerinck Consultant Simon Geerinck Nicolas Costers Project Manager Nicolas Costers Patrick Wolter Consultant Patrick Wolter This publication has been prepared for general guidance only. The reader should not act according to any information provided in this publication without receiving specific professional advice. Roland Berger GmbH shall not be liable for any