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The Exchange is part of an ongoing series on The Hive tackling the questions facing Boston’s entrepreneurs, investors, and innovators. In this edition, contributors debate whether true innovations comes best from scrappy start-ups, or from established companies with more resources to bring to bear. Scott D. Anthony argues the latter point. Read the other sides of the debate. Have your own opinion, or an idea for another topic? E-mail Hive@Boston.
A recent Gallup poll found that nearly 50 percent of 5th through 12th graders aspire to start a business someday. Having helped birth a successful professional services company, you might think I plan on steering my three young children to the wonderful world of start-ups. If current trends continue, however, my advice to them will be that if they want to change the world, they ought to join a large multinational.
Start-ups can be incredibly emotionally fulfilling, and financially rewarding. But research suggests that about half of all startups won’t celebrate their fifth birthday. Some of the recent success stories like Zynga, Groupon, and Facebook have learned that the very factors that allowed them to scale so rapidly spawn seemingly endless waves of competition.
A generation ago, large multinationals choked innovation. Today, a new generation of corporate leaders is demonstrating how multinationals that blend difficult-to-replicate assets with entrepreneurial behaviors can have massive impact. Apple and IBM served as the vanguard of this movement, but a number of other well-established operating companies have created world-changing innovations. Consider Syngenta. The Swiss agrichemical company developed an innovative program called uwezo to bring modern crop protection chemicals to individual farmers in Kenya. There are now more than 500 million of these “smallholders” around the world – and improving the productivity of their farms promises to help the world feed its swelling population.
Do you want to change the face of healthcare? Instead of going into public policy, consider helping a pharmacy retailer develop means to manage chronic conditions in their stores. Interested in helping the poor? Rather than work for an NGO, help a telecommunications company develop innovative mechanisms for people in low-income countries to avoid traveling for days to pay suppliers. Concerned about the climate? Help an IT provider develop a comprehensive solution that lets cities use technology to dramatically cut the use of fossil fuels.
Startups are working on – and will impact – these kinds of problems as well. But startups have to fight fiercely for the very thing large companies already have: The scale required to truly effect change globally.
We’ve connected garages and innovation since the days of Bill Hewlett and Dave Packard. Imagine a garage stocked with unbelievable tools. That’s what corporate entrepreneurs in this emerging new era of innovation can enjoy.
Scott D. Anthony is managing director, Asia-Pacific, of innovation consulting firm Innosight, and author of The New Corporate Garage, featured in September’s Harvard Business Review. Anthony also authored The Little Black Book of Innovation: How It Works, How to Do It (Harvard Business Review Press, 2012). Want to continue the discussion? Tweet us at @HiveBoston or email Hive@Boston.com.