The rise of corporate disruption through innovation has been a topic of discussion for several years.
Tech giants like Apple, Amazon, and Uber have gone from hungry startup companies to global giants by shaking up their respective industries with new technologies and ideas.
These disruptors are also far from outliers — the average age of S&P 500 corporations will fall by 50% to just 12 years old by 2027. This means that innovation is crucial, and established corporations are feeling the pressure to change.
It is little wonder then that C-suites are quickly prioritising expansion, with 52% of executives naming business building a top-3 (or higher) priority for growth. With the need for innovation as a means for growth, it is no surprise that corporate venturing is on the rise.
What is Corporate Venturing?
In simple terms, corporate venturing is when a company funds and incubates an external startup with these aims:
- To develop new products or services
- To enter new markets through investment, acquisition, or collaboration
Why Does Corporate Venturing Drive Growth?
The benefits of corporate venturing are manifold.
Firstly, it allows big businesses to tap into the agility, creativity, and risk-taking that are often the purview of startups. It also allows them to experiment with new technologies and business models without going through the time-consuming and expensive process of developing them internally.
What’s more, by working with startups, corporations can better understand the latest trends and consumer needs. This understanding is becoming increasingly important in today’s fast-moving, digital world.
Last but not least, corporate venturing provides a way for businesses to build relationships with the next generation of leaders and innovators.
This is valuable from a talent and brand perspective. After all, many startups are founded by millennials and gen-Xers who will soon be taking over the business world. As we all know, trust is paramount in business, and what better way to build trust is there than by working hand-in-hand with the companies of tomorrow?
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Why is Consumer Innovation at the Heart of Corporate Venturing?
In diverse Southeast Asia, businesses must constantly innovate their consumer products and services to stay ahead of the competition. This is especially important in the digital age, where technological changes and consumer behaviour can happen rapidly.
In addition, the rise of the middle class in SEA means that consumer expectations are higher than ever. They want products and services that are convenient, affordable, and tailored to their ever-evolving needs — and they are not afraid to switch brands if they do not get what they are looking for.
This puts pressure on businesses to innovate in their products and services and in their go-to-market strategies. They need to be able to reach consumers effectively and efficiently, whether that’s through online channels, offline channels, or a combination of both.
Of course, all this consumer-driven innovation takes time, money, and resources — which is why corporate venturing is such an essential tool for businesses in SEA.
By working with startups, corporations across different industries, from advanced manufacturing to foodtech, can get access to the latest technologies and ideas. They also build relationships with the next generation of leaders and innovators simultaneously.
Ultimately, successful consumer innovation allows companies to meet consumer demands and propel their businesses to the top.
What is the State of Consumer Innovation in Singapore?
Southeast Asia is a key region for corporate venturing, thanks to its ever-impressive economy and its favourable business environment.
Singapore, in particular, is a leading destination for businesses looking to set up operations and innovate. Companies, including startups and established multinational corporations, are choosing it as a base to build and expand their innovation capabilities in the Asia Pacific region.
Related Read: Putting Consumers at the Heart of Fintech Innovation »
Why is Singapore a Leading Choice for Consumer Innovation?
The Singapore Government has prioritised creating a conducive environment for businesses to grow. It also focuses on enhancing its innovation ecosystem and aims to foster innovation.
Here are more reasons that make the city-state attractive:
Government-Led Innovation Initiatives
These activities are evident in the many initiatives and programmes that government agencies have launched in recent years.
Of note is the expanded S$20 million Corporate Venture Launchpad 2.0 programme launched by the Singapore Economic Development Board (EDB). This programme is designed to facilitate companies’ launch of new ventures from the city-state.
Singapore has also collaborated with the MIT Alliance for Research and Technology to establish the SMART Innovation Centre. Companies also leverage the abilities of our 21 national research institutes, innovation labs, and research centres. Notable innovation labs include the PayPal Innovation Lab and Expedia Innovation Lab.
Small and medium (SME) enterprises eyeing technology innovation, for example, can use a range of available resources at any of the 8 Centres of Innovation in Singapore. These centres are established in partnership with chosen polytechnics and research institutes, each focusing on one of these industry specialties:
- Environment and water
- Supply chain management
- Complementary health products
- Precision engineering
Private Sector Innovation Initiatives
Apart from government-led initiatives, there have also been private-sector initiatives.
Proctor & Gamble (P&G)’s Singapore Innovation Centre (SgIC) is a world-class private research and development centre that enables the consistent trade of ideas and knowledge.
It also runs iLab, a virtual innovation festival that aims to create new ideas and innovative solutions in different industries. iLab is the conglomerate’s biggest collaboration with start-ups in the region – for example, it partners with tech start-ups, among many more. It represents its dedication to Singapore as an innovation hub and a means of giving back to the community.
A Conducive Business Environment
Beyond that, Singapore has always offered strong IP laws that protect corporate research and development (R&D) investments, robust connectivity, as well as a large pool of highly-skilled talent.
Therefore, it is not surprising that Singapore is consistently seen in the top ten innovative countries in the world, even beating the likes of China and Canada.
Put simply, Singapore is quite possibly the strongest and most vibrant innovation and digital ecosystem in Southeast Asia — which makes it the perfect place for businesses to set up corporate ventures.
What Are Some Notable Corporate Ventures Launched From Singapore?
Singapore has been a catalyst for the success stories of these corporate ventures:
- Climate Impact X
What Are Some Well-Known Innovative Companies in Singapore?
These are several world-renowned innovative firms that have established critical innovation centres in Singapore:
- L’Oreal Groupe
How is Innovation Important to Singapore?
Innovation is important to Singapore because it is a key driver of economic growth. It attracts and encourages firms to set up their innovation bases in the country and promotes the creation of corporate ventures as well.
What the Future Holds for Corporate Ventures in Southeast Asia
Looking ahead, it’s clear that corporate venturing is only going to become more important for growth-focused businesses. Singapore, especially, has set itself up well to be the corporate venture hub in Southeast Asia. It is also well-positioned as the leading gateway to the Asia Pacific.
As the region continues to grow economically, we can expect to see an increase in the number of corporations setting up ventures here, as well as an increase in the amount of funding being pumped into the ecosystem.
If you’re a business looking to use corporate venturing as a mechanism for sustainable growth, there’s no better time to do it than now, and no better place than Singapore. With the right partner and strategy, you can tap into one of the world’s most dynamic and innovative regions.
Contact us today to find out more about how you could use corporate venturing to grow your organisation; we are ready to help.
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FAQs About Consumer Innovation
- Consumer innovation is a term used to describe the introduction of new or significantly improved products or services driven by the desire to meet ever-changing consumer needs and demands.
- It is generally agreed that consumer innovation can be an important driver of growth and competition in a market, and can lead to increased efficiency, creativity, and productivity. This is particularly true in Singapore, where a thriving and innovative economy is seen as a key competitive advantage.
- In Singapore, a thriving and innovative economy is seen as a key competitive advantage. This is particularly true in the context of corporate venturing, where businesses are increasingly looking for new and innovative products and services to drive growth.This helps to promote corporate venturing, as businesses are able to tap into the creative energy of consumers to develop new and innovative products and services.