Innovation hubs can drive industry development

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Can innovation hubs be the model of the future for shorter lead times and the development of more innovative services, products and companies?

In recent years, innovation hubs have become a way for organisations to develop and test new innovative products and services. An innovation hub and its key people can be the bridge between companies, public organisations, start-ups, investors, academia and players in R&D with the aim of communicating and supporting new ideas, concepts and technologies. Large Swedish companies and organisations that run innovation hubs are, for example, Volvo, Ica and Lantmännen. But there are also several examples of hubs in the public sector in Sweden and in organisations such as the Swedish Energy Agency, Vinnova and SLU.

A report from Vinnova from November 2020 lists 18 Swedish examples of then-active company-initiated innovation hubs. An example is MobilityXlab in Gothenburg, which was founded in 2017 by six global companies in the transport sector with the goal of developing the mobility solutions of the future. Two other examples are Ericsson Garage Lindholen and BioVentureHub AstraZeneca.

When an innovation hub works best, the exchange of knowledge goes in both directions, from the company or authority that initiated the innovation hub to start-ups and vice versa. Its main task is to create bridges to new ecosystems and organisations that promote the dynamics of innovation and entrepreneurship in a positive way. An innovation hub should not be seen as the same as an incubator business even if there are similarities. The innovation hub's main purpose is to explore customer needs, technologies and knowledge in collaboration with different organisations that can be used to create new customer solutions.

In the transport sector, innovation hubs have become popular, mainly due to the changes the industry is undergoing in response to demands for extensive investment and skills development. Investing in, and building core competencies in, for example, self-driving, connection, electrification and mobility within the framework of your own operations would be an almost impossible task and also very costly without the support of hubs and strategic collaborations. An advantage of an innovation hub is precisely that it can provide skills and financing, but also the large risk exposure is borne by several companies and organisations. Through the hubs, value can also be created with shorter lead times than the companies could have achieved on their own.

The challenges for innovation hubs can be around the fear of sharing business critical knowledge, data and ideas and if the company that initiated the innovation hub has established structures or a corporate and leadership culture that creates barriers to receiving new ideas from startups with, for example, extensive requirements for testing. Some ways to minimise these challenges are to:

• Identify different needs: Give a detailed description of how the idea is to be used and its value. Use tailored messages that motivate the target group from their perspective. A lawyer and a business developer do not always look at technology development in the same way. It is therefore important to be able to describe the relevance of ideas from the perspective of different individuals at an early stage.
• Include key people: Involve the right people early in the process for greater commitment and support and create ownership by identifying who has a vested interest in taking the idea further. Sharing ownership and planning for when an idea should leave the innovation hub and continue its journey into the main organisation is crucial to its survival.
• Identify different needs: Give a detailed description of how the idea is to be used and its value. Use tailored messages that motivate the target group from their perspective. A lawyer and a business developer do not always look at technology development in the same way. It is therefore important to be able to describe the relevance of ideas from the perspective of different individuals at an early stage.
• Include key people: Involve the right people early in the process for greater commitment and support and create ownership by identifying who has a vested interest in taking the idea further. Sharing ownership and planning for when an idea should leave the innovation hub and continue its journey into the main organisation is crucial to its survival.
• Evaluate what is business critical: Define at an early stage what is anti-competitive information. The grey area around ​​what is general knowledge and what are trade secrets is often large.
• Structure good teams: Ensure that the right people, based on competencies and responsibility, are on site in forums where the pilot is tested. New roles such as idea scouts and technical gatekeepers can also contribute to a positive climate. Take small steps and use reasonable agreements that are based on the different phases and parts of the collaboration.

Innovation hubs as a form of collaboration can shorten lead times and facilitate the development of new products and services. But to succeed, companies and organisations need to create the right conditions for innovation hubs. The key is that the value that is created becomes so much greater when competence, financing, but also risk exposure, can be shared between several organisations. To develop the industry, we continue to need to see joint ventures and leadership based on long-term perspective, openness and determination.