May 24, 2024

Innovation as a Service: Democratizing Innovation Through External Partnerships


While innovation has long been a core competency of technology companies, the complexity and costs associated with internal R&D efforts are pushing many organizations to explore new models. Innovation as a Service (IaaS) leverages external partnerships and platforms to enhance capabilities and bring ideas to market faster at a lower cost.

Crowdsourcing Innovation

One approach that has gained popularity is crowdsourcing, which taps into the collective intelligence of a group of individuals through open calls or challenges. Companies like Anthropic and Kaggle have built robust platforms that enable organizations to broadcast innovation needs and competitions to a global community of experts, researchers, and citizen scientists. This wider net allows access to talent and perspectives that may not exist internally.

Crowdsourcing platforms can structure challenges in different ways depending on the problem. For simpler issues, companies may provide a straightforward description and reward the best solution. More complex problems may utilize a multi-stage process where submissions are reviewed and narrowed down over time. Either way, the crowdsourced model of Innovation as a Service democratizes the process to generate many more ideas at lower resource requirements than internal R&D.

While open calls attract a larger audience, ensuring quality and fit remains crucial. Platforms provide oversight and screening to vet submissions for viability, ethics, and other guardrails. Standardized evaluation rubrics also help companies determine which concepts show the most promise and warrant further development. Non-disclosure agreements protect intellectual property wherever necessary as well.

Partnering with Startups

Another popular Innovation as a Service approach is collaborating directly with startups whose specialized expertise aligns with specific innovation needs. Companies like AT&T, Daimler, and Microsoft have established programs that surface and support external partners addressing defined challenges or technology domains.

These partnerships allow established firms to stay on the cutting edge of new developments through startups naturally focused on disruptive, high-risk work. Large organizations can then help scale and commercialize successful solutions through their resources and customer networks. Meanwhile, startups gain access to potential clients, investors, as well as technical and business mentoring beyond their own capabilities.

The startup model of Innovation as a Service depends on establishing a mutually beneficial collaboration from the beginning. Agreements clearly outline expectations, deliverables, funding structures, and ownership terms to properly incentivize performance. Regular check-ins also ensure objectives stay aligned as projects progress. Many corporations even run accelerator programs embedding partners on-site to foster close collaboration over intensive sprint periods.

Corporate Venture Capital

A strategy with longer-term implications is for companies to directly fund external innovation channels through corporate venture capital (CVC) arms. By investing in promising startups, technologies and even other investment funds, large firms gain visibility into emerging trends and opportunities. Their capital also shapes the direction of research in domains valuable to their own business models.

Beyond financial backing, CVCs provide portfolio companies strategic resources accelerating their journey to market. A successful introduction of Innovation as a Service to potential commercial partners or customers within the parent network speed adoption and Proof-of-Concept testing. Operational support through specialized accelerators or incubators enhances outcomes even further.

Over time, CVC strategies not only bring external ideas in-house but extend corporate R&D reach and influence. Smart IP acquisitions let firms participate in groundbreaking work led somewhere else. Divestments and spinouts also commoditize innovations no longer part of the core strategy while retaining equity upside as technologies mature. With careful selection and development, CVC programs significantly multiply internal capabilities to drive innovation.

Leveraging University Research

Innovation as a Service is a less direct route to new concepts and talent are partnerships with leading academic institutions. Mega-campuses incubate immense research funding, infrastructure and top scientists pushing the boundaries of knowledge and discovery daily. By aligning priorities, companies can tap trends and developments much earlier through university alliances.

Programs create formal pipelines for mutually beneficial collaboration. Corporations may sponsor projects, provide real-world problems for theses, or even embed researchers as consultants or visiting faculty. In turn, partnerships grant companies privileged access to intellectual property and a head start on commercializing academic innovations through licensing. They also build brand affinity driving future recruitment of the brightest young minds.

University collaboration for Innovation as a Service remains a long-term play requiring sustained commitment. Regular engagements and tangible support maintain researcher goodwill critical for open-minded cooperation vs. proprietary constraints. However, the returns significantly amplify external R&D horsepower through some of the world’s most advanced non-profit research institutions. It fuels the innovation engine with fresh perspectives constantly reinventing entire industries at their foundations.

In summary, Innovation as a Service utilizes different strategies to harness external capabilities beyond internal constraints. Whether through crowdsourcing, startups, venture investing or academia, these models democratize the process, multiply resources, and infuse organizations with disruptive ideas from new perspectives. They facilitate more agile innovation pipelines transforming obstacles into opportunities that drive sustained growth, competitiveness and leadership in any market.


  1. Source: Coherent Market Insights, Public sources, Desk research
  2. We have leveraged AI tools to mine information and compile it