“No matter who you are, most of the smartest people don’t work for you, but for someone else”: to use this expression of Bill Joy, founder of “Sun Microsystems” Inc., of Itai Green (Itai Green), Israeli expert in open innovation. and CEO of “Innovate Israel”, underlined this evening, in Thessaloniki, the need for large companies and in Greece to seek out the smartest people where they exist: in startups, research centers and universities – and cooperate with them.
As he said, statistically, no big company, not even Google, can have brighter minds than anyone else. And this, after all, is one of the reasons why the process of developing internal innovation (internal innovation), that is, what is developed within a company, by its own leaders, is essentially a “waste of time and money” in 90% of cases. cases: “the reason is that when you think of something very innovative, implementing the idea and developing it (within the company) will cost a lot of time and money and by the time the product arrives in the market, it will be obsolete, because the competitor has already launched, through partnerships with startups”, he explained.
For this reason, the development of external and open innovation (external & open innovation), for example through collaborations with start-ups, is much more effective. “If you agree with me that most of the smartest people don’t work for you, but for other companies, universities, and startups, your biggest challenge this year should be getting those people to work for you. The The biggest challenge for big companies that want to stay alive in the next three to five years is to collaborate, to partner with these smart people, and that’s not always easy, because the culture of big companies is completely opposite. to that of startups,” he said, referring to that direction and Israel’s successful model.
Why have more than 500 multinationals turned to Israel to innovate?
“Today, more than 500 multinationals are constantly looking for innovations in Israel, in the ecosystem of open innovation. Not because they like us or are friends of the country, but because they want to be on the next wave (…) So they come “We asked Israel to innovate, because they are afraid of becoming useless, obsolete. So we’re lucky to have these 500+ big companies ‘running’ open innovation actions in Israel, and we’re learning from their experience how to do it right,” he said.
According to Itai Green, big companies need to convince an entrepreneur (i.e. an entrepreneur who has an exclusive idea to start a new business and who does not base a company around an idea or a product already existing), a startupper, to knock on their door, before knocking on the door of the competition. And to achieve this, they need to make life easier for the entrepreneur, that he doesn’t have to knock on 30 different doors in the company to come up with a solution, that there is one person who will serve as point of contact with them. people.
However, this facility is not the only one necessary for startuppers and other brilliant minds to approach large companies, so that they can offer solutions to their problems and challenges. An essential condition is that the senior executives of large companies and their leaders really believe in the process of developing innovation and fully understand it.
According to Itai Green, large companies must have at least one member on their board of directors (BoD) with a solid experience in technological innovation. “In Israel, every bank is required by law to have at least one board member with strong expertise in technological innovation. Don’t wait for your government to make it mandatory, do it yourself “, he underlined, also stressing that there must be diversity in the Boards of Directors, among other things in terms of gender as well as age, at a time when 63% of the leaders of S&P 500 index companies are between 60 and 64.9 years old, 17% belong to the age group 65-69.9 years old, 16% 55-59.9 years old and only 2% under 55 years old.
“Share your challenges”
A second key requirement is that large companies have the courage to share the challenges they face with the ecosystem. “When business doesn’t communicate about the challenges it faces, entrepreneurs won’t come up with solutions,” he said, adding that it’s equally important to the well-being of a great business. than to attract and retain high-level human talent. we do not retain talents, those who are motivated by their “I”, but those who are curious and willing to seek innovative solutions.
It is also very important that startuppers are compensated for the pilot projects they carry out in collaboration with large companies. Both because that is how they are motivated and because when they are paid for what they offer, they will share this positive experience and so people who have solutions will knock on the door in the future. of that particular company and not that of its competitors. As a result, big companies should pay for the purchase of shares of companies in the startups that work with them, instead of considering that they should give them, for example, 25% of their capital, just because.. . they did it to them. honor to implement a pilot project with them.
The uniqueness of Israeli ecosystem culture and the gift of the pandemic
Itai Green also spoke about the uniqueness of Israeli culture, where all participants in the ecosystem by definition have a mindset of cooperation and sharing the challenges they face. “Even competitors share their best practices to get everyone moving faster. They’re not afraid to share, they see sharing as a strength,” he said.
He added that the pandemic may have been a disaster for everything, but for the development of innovation it has been a gift. Crises, he explained, are times when people innovate, when companies build the “next big thing.” And now technology, with the help of, for example, artificial intelligence, makes all the processes much easier, so that it doesn’t take as many years as in the past to develop an important innovation.
Itai Green’s speech, titled “Open Innovation: Business Benefits of Collaborating with Startups”, was organized by Alexandria Innovation Zone (AZK), Elevate Greece and Greek Industry Associations (SBE) and exporters (SEBE), in the premises of AZK SA.