Sustainable Innovation

Innovation

I unfortunately am old enough to remember the merchants who did not believe in e-commerce, or the advertising networks that did not want to include digital advertising in their media plans, or even the television and film industry that snubbed streaming, and the gaming industry that belittled mobile video games, and so on.

We all know dozens of examples of trains (=trends) lost by companies.

I have often wondered why many companies fail to leverage some of the megatrends that seemed obvious to me, only to frantically chase the enlightened first movers. And this is still happening: I will give a few cross-sector megatrends that have been established for a few years as an example, which I believe are still inexplicably underestimated, if not completely ignored:

1. Artificial Intelligence

2. Big Data

3. Blockchain and Transparency

4. Cyber Security

5. Open Innovation

6. Privacy, as ownership and portability of data

7. Sustainability

8. User Experience

By now, all companies have made compromises with digital (“every company is a digital company”), so what still keeps them from understanding that the only possible answer to not miss out on the trends that come is: Innovate?

A Continuous Process of Open Innovation

Innovation is not something you can tend to do in fits and starts, perhaps only when you realize you have fallen behind. Either you equip yourself seriously and consistently, or you become (if you are lucky) a follower. All the trends listed above encompass their own sub-trends to monitor, with more or less intensity depending on one's mission, regardless of the sector. And non-purely digital companies should do this even more.

The model startup studio like that of Startup Bakery was created specifically to allow companies to prepare themselves; they stimulate, support and ultimately acquire solid startups that have technology, talent, and innovative processes within them. The difference compared to a research center, detached from market logic, or compared to a corporate division, constrained by procedures and internal biases, is clear: the startup studio allows the partner company to remain focused on its core business, delegating innovation generation to the outside, internalizing it in the context of Open Innovation only if it meets the agreed standards.

But among all the trends mentioned in my list, there is one that I find particularly inevitable: Sustainability. It is perhaps also the broadest trend, and for this reason, when discussing other trends, it cannot be done without considering it.

Sustainability: the protagonist of 2021?

The concept of Sustainability has been acknowledged. The trend, already in place globally between 2017 and 2018, arrived around the same time in Italy, used 2019 to consolidate, and the strange 2020 to launch itself, finally positioning itself as a potential “protagonist” of 2021.

Source: Google Trends

Thus, companies, all of them, from startups to large listed groups, will have to deal with ESG (Environmental, Social & Governance) and with SDG (Sustainable Development Goals). There are many things to do, and it is therefore normal that many companies have difficulty “converting” using traditional logic and approaches. Very often being sustainable for a company means generating lower, if not even negative, returns in the short term, but these are inevitable investments that sooner or later everyone will have to make, or risk exclusion from the market.

In this case, I also do not see how one can become more sustainable without innovating: processes, technologies, skills, etc. must first be tested, preferably with a lean approach, and only afterward, introduced. Companies will become more sustainable if they manage to test sustainable solutions and practices they intend to implement on their stakeholders (present or potential). And thus, I have quickly linked Sustainability to User Experience. But as I said, I could easily relate it to any of the other trends mentioned.

Sustainable Open Innovation

Innovating also means making mistakes, but doing so quickly and learning from one's errors. For a company, outsourcing the innovative process to a startup studio also means outsourcing potential mistakes, reducing risk and related pressures. It also means having a constantly active observatory on the world of Innovation and finally being able to choose which trend to internalize, reducing acquisition costs and drastically cutting integration costs, which are often underestimated.

All the startups spawned in Startup Bakery contain sustainability elements and are therefore linked to at least one of the SDGs. In this way, we aim to bring Sustainable Innovation into our entrepreneurial fabric.

The wish I feel to make, especially for the Italian System, is that the keywords related to “Innovation” follow the same path taken by the keywords relating to “Sustainability”. Because there will not be one without the other.