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 (status as of February 2019).
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).
For the young initiatives, Berlin has become an innovation hotspot
Almost 80 percent of the programs have been in existence for less than 5 years, reflecting the dynamism of innovation activities. Geographically, there are clear emphases:
- Startup capital in Germany is and remains Berlin - even among the DAX 30 corporations
- Many programs can also be found in the Rhine-Main area, in the Ruhr area as well as Stuttgart and Munich
- Internationally, the 30 DAX companies offer 14 programs - hotspot is the Silicon Valley in California
As around a quarter of all initiatives are located in Berlin, Berlin can feel as the innovation capital of the DAX 30 companies - at least in terms of start-up activities.
In particular, SAP (7 programs) and Deutsche Telekom (6 programs) have a large number of startup activities. However, no conclusions can be drawn from the number of programs on the innovative strength or innovation success of the companies. Each program has to be evaluated independently.
The graphic for the DAX 30 startup and innovation programs is available for free download.