Many new companies pose a serious competitive threat to established companies with their dynamics and pace of innovation. As a result, large companies are also attempting to emulate the strengths of startups for themselves using special programs. With the DAX 30 startup and innovation monitor , mm1 presents a current overview of the initiatives of the largest German corporations.
Startups - Role models for large companies
Digitalization and Industry 4.0 are buzzwords that represent modern challenges for established companies. Numerous startups are growing at a high speed, fueled by the entrepreneurial spirit, venture capital, and the use of sleek, customer-focused and iterative development methods such as lean startup or design thinking. Unencumbered by existing business, startups are furthermore able to create radical and disruptive business model and product innovations. Large, established companies are increasingly striving to combine the strengths of successful startups with their own strengths, and they are implementing programs and organizations that are specially tailored to that end. mm1 is furthermore presenting a new, comprehensible and consistently updated overview.
Roughly half of the initiatives are accelerators
More than 90% of DAX 30 companies have now implemented special programs for startup and innovation activities. They can be divided into three categories. The first are incubators for quickly launching new business models. The second are accelerators for swiftly implementing an idea up to market readiness. And lastly, there are venture capitalists for a pure financial interest in promising startups. mm1’s research shows that roughly half of the 67 identified DAX 30 startup initiatives are accelerators. As such, the activities focus on accelerating existing products and business ideas.
Companies prefer in-house initiatives
The programs are organized either as spin-offs or as internal company departments. In the case of incubators and accelerators, the in-house variant is prevalent, because existing processes and resources can usually be used more easily in an integrated unit and risks can be mitigated better, even if this can occur at the expense of entrepreneurial and creative freedom. On the other hand, venture capitalists are usually spun off of the company as standalone venture capital companies (VCs).
Berlin advances to become an innovation hotspot for these young initiatives
Nearly 80 percent of the programs have been around for less than 5 years, which illustrates the dynamics of the innovation activities. The preferred locations in Germany are Berlin and Munich, although the DAX 30 companies launch some initiatives directly in Silicon Valley as well. Since roughly a fourth of all initiatives are in Berlin, it can be considered the innovation capital of DAX 30 companies–at least when it comes to startup activities.
"We assume that companies will continue to expand their startup and innovation programs this year as well. Through our annual updates to the DAX 30 startup and innovation monitor, we will keep track of how durable the companies are and whether the diverse program landscape will last in the medium-term as well", explains Volker Scholz, Managing Partner at mm1.
The graphic for the DAX 30 startup and innovation programs is available to download free of charge.