The value of your ideas is often underestimated.
But in the world of innovation, the ability to use your ideas to drive your company’s innovation strategy can be an extremely valuable asset.
That’s the takeaway from a new study published in the Journal of Entrepreneurship.
The study, which was conducted by two New York-based consulting firms, used data from the McKinsey Global Institute’s Global Competitiveness Index and looked at the effectiveness of six different strategies: strategic alliances, innovation clusters, technology incubators, technology hubs, innovation accelerators, and innovation labs.
The key takeaway?
A strategic alliance is the best way to bring a new idea to life.
“The value of innovation in a strategic alliance depends on how the business can benefit from your ideas, says senior author Brian D. Hirsch of McKinsey & Co. “Ideas are the glue that holds the whole business together.
“So what are your chances of being successful?
The researchers surveyed 7,813 employees and surveyed 2,000 partners, who were asked to rate the strategic strengths of their companies based on three key metrics: business value, innovation value, and impact value.
The study concluded that a company with a strong strategic alliance will outperform all of its competitors on those three measures.”
The study was conducted in partnership with McKinsey and Hirsch Consulting. “
Companies that develop innovation hubs or incubators can create significant value for their partners, and those partnerships will generate more business.”
The study was conducted in partnership with McKinsey and Hirsch Consulting.
The authors say they were inspired by a McKinsey study that measured the effectiveness and ROI of companies that created innovation clusters.
The authors found that companies that started innovation hubs were actually more likely to generate an annual return of 3.5 times than those that did not.
“It’s a big, positive number,” says Dan Zaremba, vice president of consulting at Hirsch, adding that innovation hubs have a higher return on investment than startups.
The impact of strategic alliancesIn addition to creating value for partners, strategic alliances are also effective for creating value in the business.
The researchers found that alliances that resulted in significant investments in technology helped companies generate nearly 3 times the value per employee than companies that did so without an investment.
The analysis also showed that innovation accelerator and incubator partnerships led to significant returns on investment.
For example, in the case of an innovation hub, each partner invested $5 million in a new technology to bring their business to life, while in the incubator, each partnership invested $2 million to create a product that helped accelerate innovation.
The researchers also found that partnerships that started incubators generated the largest return on capital of any kind of partnership.
This was true even after accounting for costs, and it was the biggest return of any type of partnership, including those between partners who invested in different types of products or services.
“When you combine the value generated by the partners in the strategic alliance with the investment by the incubators and accelerators in the market, they add up to a big return,” says D.J. Hinshaw, co-author of the study.
Hirsch says the results are important for all of us who want to create innovation.
“The strategic alliance can create value for the partner,” he says.
“But the value created by the partnership is also important for the business as a whole.
So the strategy needs to be based on long-term value.
It can’t just be based around a short-term opportunity.”
It’s an important lesson to take away from this study.
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There’s a lot of opportunity for innovation, and you have to be creative about how you leverage the opportunities.”
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