Innovazione Digitale Morning Future
Imagining Trend 19 February Feb 2018 0830 19 February 2018

How digital innovation is changing the face of business

Digital disruption is rewriting business strategies, as demonstrated by the constant growth of budgets allocated to Information and Communication Technologies. The figures of the revolution in progress

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In recent years, we have been witnessing a momentous transformation in the competitive paradigms of enterprises, mainly due to that digital disruption that has dragged many companies towards success and many others towards a downward spiral. All, however, have had to take stock of an inexorable and ongoing cultural change (affecting customer behaviour, corporate leadership styles, and speed of decision-making) and of the need - at a time marked by limited resources - to pursue innovation promptly and responsively, especially in the digital sphere. This transformation is moving organisations, governance systems, design methods and sourcing models towards an increasingly agile and open approach.

Digital innovation seems to be having an increasing impact on the strategies and spending decisions of Italian firms. This is demonstrated by a constant growth in the ICT budgets of more than one in three Italian companies (36%), for a growth rate of 1.8%-1.9% in 2018. These are the figures that emerged from the recent survey conducted by the Digital Transformation Academy and Start-Up Intelligence Observatories of the Politecnico di Milano, based on questionnaires and direct interviews with over 270 Chief Innovation Officers and Chief Information Officers. The survey provides an accurate snapshot of digital innovation today, in terms of the resources and governance methods used. Moreover, it reveals how extensively Open Innovation models are adopted, and the relating degree of satisfaction.

Digital technology is transforming Italy’s entire business ecosystem. Growing interest in Open Innovation goes hand in hand with an increasing use of previously underexploited sources of innovation, such as start-ups, research centres, universities, external customers and non-competitors. Among the data revealed by the survey published by the two Observatories, particularly worthy of note is the fact that 55% of companies are attempting to raise awareness on internal venturing models and that 38% already collaborate with start-ups. While the percentage of companies that have initiated Open Innovation projects still appears to be limited (28%), those who have, report significant satisfaction and adopt increasingly comprehensive and systematic methods. Moreover, a further 32% is willing to initiate such a project in the short term. Finally, 20% is unaware of this phenomenon and a further 20% is not interested in developing this type of initiative.

Among the companies that adopt Open Innovation initiatives, 23% practice Inbound Open Innovation

Mariano Corso, Scientific Officer of the Digital Transformation Academy Observatory

Among the companies that adopt Open Innovation initiatives, 23% practice Inbound Open Innovation, a model that incorporates external innovation within its processes. 73% of these companies develop collaborations with universities and research centres, 56% perform start-up intelligence activities, 48% organise Call4Ideas and external contests, 34% perform partner-scouting activities on traditional suppliers or conducts hackathons, datathons and appathons, while only 14% opt for crowd sourcing.

A road less travelled is that of strategic financial levers, such as corporate incubators and accelerators (20%), acquisitions (19%) or the investment of Corporate Venture Capital in business start-ups (12%). Finally, much less widespread (9%) is Outbound Innovation, in which innovation is directed from inside the company, outward. 22% of these companies develop joint ventures with other businesses, 12% develop platform-based business models, 8% license their products, and 3% chooses to either donate or sell patents and spin-offs.

“The growth trend in digital innovation is expected to accelerate in 2018, also in Italy. We will see an increase in corporate budgets and interesting digital investments in Lines of Business,” comments Mariano Corso, Scientific Officer of the Digital Transformation Academy Observatory. “Managing digital innovation effectively means rethinking organisations as a whole, from the structure through to processes and coordination mechanisms. Despite being often tied down by organisational and cultural inertia, and blocked by slow, burdensome operational models, companies are actively working towards this transformation. On the one hand, they have started experimenting with collaborative, immersive, interdisciplinary internal organisations, and on the other, they are opening up to a new ecosystem of partners, such as start-ups or research centres, capable of responding quickly and flexibly to the need for innovation.”

In short, there is a growing culture of innovation and a rising awareness of the need to review organisational roles, competences and processes, with a view to improving the ability to seize opportunities for innovation, absorb knowledge from without, and increase the engagement of top management in various business areas. Why? Because there is no longer just one, dominant organisational model for managing innovation. Instead, it is important to assimilate the new business culture at all levels.

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