Metcalfe’s law posits that the value of a telecoms network is proportional to the square of the number of connected users (n2). Coming after last month’s Global Corporate Venturing & Innovation Summit in Sonoma, California, and you can see why having 450 of the world’s largest corporation’s brightest minds in one venue might create some amazing results.
As Robert Wolcott, co-founder of the Kellogg Innovation Network, itself an impressive forum for collaboration, noted in the summit review, these corporate venturing leaders are the “tip of the spear” in terms of helping their parents grapple with the increasing, and increasingly disruptive, pace of change around the world.
It might seem self-evident now, after Global Corporate Venturing has tracked an 80% increase in the number of units since our launch in 2010, that corporate venturing would be this tip of the spear, but its true potential has probably still to be realised.
Harvard Business School professor Henry Chesbrough’s seminal book Open Innovation was published in 2003, but he tapped the zeitgeist. The defining spirit or mood of the post-millennial period so far has been openness and innovation. Notwithstanding concerns from nation-states and individual reactions to globalisation and technology innovation, the drive by capital to seek better returns and people to outperform remains intense. Individuals, companies and countries, such as Russia (see innovative region), that are forced or choose to shut themselves off, risk falling behind the innovation curve.
The “combinatorial explosion” resulting from adding people and ideas in different ways is staggering. Paul Romer gave some sense of how much scope there is by noting that “possibilities do not merely add up – they multiply”.
In a blog post he noted: “The periodic table contains about 100 different types of atom. If a recipe is simply an indication of whether an element is included or not, there will be 100 x 99 recipes like the one for bronze or steel that involve only two elements. For recipes that can have four elements, there are 100 x 99 x 98 x 97 recipes, which is more than 94 million. With up to five elements, more than 9 billion. Mathematicians call this increase in the number of combinations ‘combinatorial explosion’.
“Every generation has perceived the limits to growth that finite resources and undesirable side effects would pose if no new recipes or ideas were discovered. And every generation has underestimated the potential for finding new recipes and ideas. We consistently fail to grasp how many ideas remain to be discovered.”
Open innovation combines the benefits of internal resources with the limitless number from working with third parties. The challenge is working out which ideas can be used, by whom, when and how. Corporate venturing becomes a focus for this translation of idea potential to useful innovation, and the rising stars (see our special supplement published with the GE-sponsored awards dinner at Sonoma) and leaders who attended the summit, as well as the others in the industry, really are the tips of the spear allowing entrepreneurs, venture syndicates and corporations to benefit.
But this is a really hard job. The latest wave of senior corporate venturing leader changes, including GCV’s exclusive reports on Claudia Fan Munce retiring from IBM and Nagraj Kashyap switching to Microsoft from Qualcomm, sheds a light on the next generation and the skills they might need.
First among these skills will be an ability to handle uncertainty and diversity or plurality of thinking. The opportunity comes from building on what industry legends, such as former Intel Capital head Arvind Sodhani and Fan Munce, have done to position the sector for further growth and sustainability by helping take the message out to entrepreneurs, venture investors and corporate managers through the GCV Leadership Society.
And while the industry readies itself for growth and change, so does this title. In last month’s issue, Toby Lewis, as editor, noted he would be moving this month to the new role of chief analytics officer and it is my pleasure to thank him for all his work over the past few years building Global Corporate Venturing into the industry’s primary trade publication, providing the data, information, comments, analyses, and events and training. In addition, Gregg Bayes-Brown leaves as our editor-at-large (see University Corner), and Thierry Heles takes over as editor of Global University Venturing and Global Government Venturing.”
I look forward to continuing Toby’s hard work and having the pleasure of further opportunities to meet those in the industry creating our collective future. Let me know what more we can do to help you all, as well as your allowing us to share your news and insights.