Discover how open innovation can boost your business

Open innovation is transforming the business landscape in Spain, enabling large organizations to remain competitive in an increasingly dynamic marketplace. Companies no longer rely solely on their internal resources to develop new products and services, but are opening their doors to external collaboration. This approach allows them to tap into the talent, innovative ideas and technology of startups, universities, research centers and even competitors.

Through open innovation, Spanish companies are managing to accelerate the pace of their transformation, adapting to new market demands. 

In this blog, we will explain what this concept is, why it is gaining prominence in Spain and how you can apply open innovation in your organization to maximize its impact.

What is Open Innovation?

So, what does the concept of "Open Innovation" mean? Don't worry, we explain it to you in a very simple way.

It is a search for innovative solutions through an entity's collaboration with external sources. Basically, it involves companies using their own ideas, technologies and knowledge as well as that of external organizations to innovate and create new solutions.

In recent years, the increase in interest in implementing this methodology, as explained in the Startup Radar report madri+d 2024report, is due to several key factors, including:

• The need to maintain a competitive advantage;

• Rapid technological acceleration, which requires access to external resources and expertise;

• The growing interest in creating innovation ecosystems and inter-company collaboration;

• The need to reduce risks associated with research and development;

• Customer demand for more innovative solutions.

These factors mean that more and more Spanish companies are integrating open innovation into their strategies to foster collaboration and optimize their ability to respond to changes in the market.

Advantages and risks

Applying open innovation has its pros and cons. Companies can benefit from a number of advantages such as the following:

• Reduction of research and development costs;

• Increased productivity by incorporating external ideas;

• Improved market research accuracy and customer focus;

• Improved project planning and delivery performance;

• Creation of synergies between internal and external innovations;

• Accelerating digital transformation;

• Creation of new innovative business models.

But there are also some risks you should be aware of, such as:

• There is a risk of disclosure of confidential information;

• The host organization may lose its competitive advantage as a result of disclosing intellectual property;

• It is difficult to control and regulate the parties involved in the project;

• There is a possibility of inadequately identifying and incorporating external innovation;

• Implemented open innovation strategies may not allow their extension beyond the company;

• A conflict of interest may arise.

Despite the risks involved, the potential return in terms of innovation and growth often outweighs the downside if properly managed.

Types of Open Innovation

There are 3 types of open innovation, which are mainly distinguished between:

1. INBOUND: This type is the most common. Companies seek ideas and technologies from outside to use internally. This includes collaborating with startups, universities, doing hackathons, launching challenges, doing pilot tests, investing or buying other companies.

2. OUTBOUND: Companies allow others to use their own ideas that they are not taking full advantage of. This can be done through licensing or partnerships.

3. COUPLED: Two or more companies collaborate to innovate and then each uses the results of that collaboration in its own way. This is useful for entering new markets or handling complex projects together.

The implementation of one type or another of this methodology will depend, above all, on the objective of each company and what it seeks to achieve.

Examples of Open Innovation

Now, let's look at some of the case studies of open innovation implementation, to inspire you on how you could apply this methodology in your company.

An outstanding case of inbound innovation that could serve as an example for you is the Santander BankThis financial institution has adopted open innovation strategies to stay at the forefront of a constantly evolving industry.

Banco Santander has launched several initiatives to foster collaboration with startups, universities and other institutions. For example, its acceleration program Santander Xacceleration program, which supports entrepreneurs and startups at different stages of development, has launched several open innovation challenges and competitions, such as the "Santander X Global Award".

This initiative rewards the most innovative startups and scaleups in various categories, from financial technology to sustainability. These competitions not only identify and support the most promising projects, but also allow Santander to incorporate new ideas and technologies into its own operations. 

In its 2020 edition, from Tetuan Valley we developed a mentoring program for the mentoring program highly specialized mentoring program for 4 of the finalist startups in which we accompany with expert and individualized mentoring to several projects selected for the award.

In turn, Siemens Mobility also chose to use this methodology and came to us, the Tetuan Valley association, with the challenge of an intrapreneurship program. intra-entrepreneurship program among its employees focused on technological solutions for its customers. Then, we offer training tailored to the needs of its innovation division and work closely with participants to successfully develop their international projects.

In addition, in Tetuan Valley we also offer open innovation serviceswhich have been very successful.

Another example of open innovation is Telefónicawhich, through its platform Wayraplatform, has established an open innovation ecosystem that fosters collaboration with technology startups, allowing the company to access new ideas and solutions that enhance its service offerings.

Figures and statistics

The impact that open innovation has had on Spanish companies has been quite large and, moreover, progressive in recent years. This can be seen by analyzing different reports published over time.

Corporate entrepreneurship in Spain is no longer a little-known concept in large companies and has become a very important element that is increasingly taken into account in strategic plans.

The Santander International Center for Entrepreneurship (CISE) has published a report called II Report on Corporate Entrepreneurship in Spainin which the topic of open innovation and how it has affected business activity and the entrepreneurial ecosystem is discussed at length.

According to the aforementioned study, it is known that more than 84% of large Spanish companies bet on corporate entrepreneurship to gain flexibility and nearly 80% of the companies that implement open innovation admit having started to make more use of it less than ten years ago, which suggests that it is a relatively recent trend.

This growth is also visible thanks to increased collaboration with startups and independent entrepreneurs by corporations. The adoption of these practices has risen from 23% in 2017 to over 78% in 2020, a percentage that has continued to grow thereafter.

In addition, according to the Open Innovation Report 202375% of Spanish companies that implemented open innovation in their business activity were satisfied with their projects.

Open innovation is a very valuable tool for all those companies that want to stay ahead of the curve. This methodology has become an important trend around the world, especially in technology companies and startups, according to the World Intellectual Property Organization's Global Innovation Report 2023..

Let's recap

For large companies, open innovation not only serves to improve their competitiveness, but also to foster a culture of collaboration and entrepreneurship within their own organizations. This approach allows Spanish companies to be at the forefront of technological innovation, strengthening their relationships with other entities and players in the entrepreneurial ecosystem.

We can conclude that collaboration between large companies and external collaborators, such as startups or universities, creates a dynamic ecosystem and enriches everyone involved, driving innovation and progress together.

From Tetuan Valley we observe firsthand how these synergies enhance creativity and innovation capacity. That is why we are dedicated to facilitating these connections, offering startups the necessary support so that they can reach their full potential.

We firmly believe in the power of collaboration and are committed to continue building bridges between entrepreneurs and large corporations, convinced that together we can transform the future of business.

Contact our team to learn more about how to apply open innovation here.