In this so-called era of smart, companies, coun-tries and individuals will be judged by how they apply knowledge to create value.
For US-listed IBM, which coined the term era of smart, its own value will be created from amplifying innovation and creating technology and a platform for others to help increase the abilities of individuals and institutions.
The ideas have already helped turn IBM over the past 100 years from a maker of meat slicing equipment to an information technology group with $106.9bn in turn over last year and 433,000 employees round the world, according to Claudia Fan Munce, managing director of IBM’s venture capital group and vice-president of its corporate strategy, who contributed to Global Corporate Venturing’s webinar series.
Fan Munce, who last month was picked to join US trade body the National Venture Capital Asso-ciation’s main board as its first corporate member, was talking as part of a webinar series co-hosted by Global Corporate Venturing and its sister title, Global University Venturing, and academia organisation the National Council of Entrepreneurial Tech Transfer (NCET2).
The next two webinars are Cisco and Takeda in May and June respectively – and please drop me an email if you want to be considered for the series or have ideas for our new website covering university venturing and want to register for the forthcoming magazine.
Alongside Fan Munce in the last webinar, was James Spohrer, director of IBM’s university programmes worldwide. They described how IBM was managing its innovation pipeline (see graphic) by working with its staff, external partners, such as universities and venture capital-backed start-ups – often by being a limited partner in a venture capital fund – and entrepreneurs directly, through the SmartCamp (see footnote) and broader Global Entre-preneur programme started in 2010.
Fan Munce said: "At IBM, we are technology integrators, not a provider of black boxes ourselves. This means we have a huge appetite to bring new partners into our ecosystem."
These partners include 934 participants in its Global Entrepreneur programme and more than 10,000 independent service vendors in 170 countries.
Fan Munce said the Global Entrepreneur programme had been "successful beyond imagination" in reaching entrepreneurs earlier and not necessarily through venture capital firms,partly because it had brought in strategic partners, such as universities.
Spohrer said university start-ups and incubators were a growth area for IBM’s partnership model – see box below for the methodology behind how 400 people at IBM are approaching more than 5,000 universities around the world.
Building on a quote by John Sexton, president of New York University, about how to build a world-class city through creating a top university, Spohrer said: "More than ever, universities will generate and sustain the world’s idea capitals and, as vital creators, incubators, connectors and channels of thought and understanding, they will provide a framework for global civil society."
Spohrer said of the 144 acquisitions made by IBM over the past dozen years, 50 had been started by people at university and more than 50% still had connections to academic institutes.
But if a university-based entrepreneurial ecosystem is a necessary factor for regional success, then the example of social network Facebook’s development is a chilling example. Spohrer said that while Harvard University contributed $4.8bn and 44,000 jobs to the Boston and Massachusetts region in 2008, the fact that Facebook was started on campus but then moved to California – and the school’s endowment had no stake directly or indirectly – he questioned how the region could have benefited.
The Facebook example is helping spawn a wave of university venturing funds around the world to take and manage equity stakes in student and faculty businesses while on campus and in the longer term.
By keeping close to universities, venture capital firms and entrepreneurs in all guises, IBM is positioning itself to respond to future technology waves.
Fan Munce said: "Five years ago, we did not expect social media to be so relevant to our enterprise customers, but by being close to entrepreneurs and the venture investing trends, we have been very aggressive in acquiring and partnering companies in that space."
That IBM is the only large technology company from the mainframe era to have thrived through the personal com-puter and into the so-called SoMoLo (social, mobile, local) internet era shows how the group has been prepared to disrupt its own business lines and jump on trends not invented inside Big Blue.
To this end, IBM’s personnel strategy is one of the main reasons behind its success. With more than 55% of its staff having less than five years’ employment at the company, the company attracts talented people, but as business units mature there is also a steady transfer of individuals to new, faster-growing areas as they build out or back into entrepreneurial ventures (see graphic).The insights from the webinar and the work the company is doing to integrate a complete and integrated innovation toolkit makes IBM an impressive case study in next- generation corporate venturing, where universities are playing an increasingly central role.
*Footnote: Martin Kelly, a partner of IBM’s venture capital group reporting to Fan Munce, is shortlisted for the Global Corporate Venturing Personality of the Year Award to be presented on May 14 at a sold-out gala dinner at the Royal Exchange, London, UK. Kelly, who was nominated for his role in setting up SmartCamp, will also be speaking at the following day’s symposium at Centre Point, alongside Profitero, winner of the most-recent Smartcamp.
Box: IBM university programmes: the 6 Rs
1. Research: Research awards focus on grand challenge problems and big bets
2. Readiness: Access to IBM tools, methods, and course materials to develop skills
3. Recruiting: Internships and full-time positions working to build a smarter planet
4. Revenue: Improve performance, the university as a complex enterprise (city within city)
5. Responsibility: Community service provides access to IBMers’ expertise and resourceshttp://www.ibm.com/ibm/ibmgives/
6. Regions: Regional innovation ecosystems – incubators, entrepreneurship, jobs