Corporate Innovation: Definition, Benefits & Examples

Many companies face the challenge of staying competitive while managing the demands of their day-to-day operations.

As industries evolve through shifts in technology, customer expectations, and global dynamics, it’s becoming clear that only those willing to embrace change and take calculated risks can truly thrive.

This requires a mindset that goes beyond routine improvement, encouraging fresh thinking, experimentation, and long-term vision.

In this article, we’ll explore what corporate innovation really means, why it is essential for modern businesses, and how leading organizations are bringing it to life. Let’s get started!

What is Corporate Innovation?

Corporate innovation is a structured approach that allows companies to develop and launch new ideas, products, services, or business models.

Here are the key benefits of corporate innovation:

• Competitive advantage – Innovation enables companies to stay ahead of competitors by developing smarter, faster, and more relevant solutions that meet changing customer needs.
  14 of the 20 most profitable global companies from 2018 to 2022 expanded their markets or created new ones through major innovation investments.
• Increased revenue – Expanding into new markets and creating fresh value through innovation helps businesses unlock new growth opportunities and drive higher sales.
  In fact, companies that prioritize innovation, report 11% higher revenue growth compared to those that don’t.
• Adapting to change – A strong innovation culture helps businesses stay agile and respond quickly to evolving market trends, customer behaviors, and technological shifts.
• Future-proofing – Investing in innovation equips companies to stay relevant and competitive over time, ensuring they’re prepared for future challenges and industry changes.
  Firms with strong innovation capabilities are 2.4x more likely to be market leaders over the long term.
• Brand differentiation – Companies known for innovation stand out in crowded markets, building a distinctive identity that attracts customers, partners, and investors.
• Improved customer experience – Innovation enables companies to deliver more personalized, seamless, and satisfying experiences that build customer loyalty and trust.
  According to Qualtrics research, companies leading in customer experience (CX) outperform laggards by nearly 80% in revenue growth.

Types of Corporate Innovation

Corporate innovation generally falls into two main categories: open innovation and closed innovation. Each takes a different approach to how new ideas are developed and brought to life.

Open Innovation

Open innovation emphasizes collaboration that extends beyond the boundaries of the organization.

Companies using this approach team up with external partners, such as startups, universities, research institutions, or customers, to exchange ideas and develop new solutions together.

To embrace open innovation, you can adopt several strategic models:

Venture Capital as a Service

Venture Capital as a Service (VCaaS) is when companies team up with outside venture capital firms to invest in startups that match their long-term goals.

Instead of running your own venture arm, rely on experienced investors to spot promising new technologies and companies.

This way, you get early access to innovation and potential disruptors in your industry, without having to build or manage an in-house investment team.

At BMW, for example, this model is used through BMW i Ventures, which acts like a hybrid of corporate venture capital and VCaaS. While BMW backs it, it operates independently and partners with startups in areas like autonomous driving, AI, and mobility services.

Partnerships and Collaborations

Instead of developing everything on your own, team up with other businesses, universities, or research centers to share ideas, skills, and resources.

These partnerships help speed up the innovation process by combining each partner’s unique strengths and expertise.

A notable example is the collaboration between Pfizer and BioNTech. During the COVID-19 pandemic, Pfizer, a global pharmaceutical giant, collaborated with the smaller German biotech company BioNTech to develop one of the first mRNA vaccines.

Pfizer brought its large-scale manufacturing and global distribution capabilities, while BioNTech provided its cutting-edge mRNA technology.

External Corporate Accelerators

External corporate accelerators are programs run by companies to help startups grow, even if those startups do not form part of the mother company.

These accelerators offer services such as mentorship, funding, workspace, and access to industry experts.

The goal is to support innovative startups while providing the company with an opportunity to tap into fresh ideas and technologies.

Microsoft for Startups is an external corporate accelerator run by Microsoft. The program is specifically designed to support independent startups by helping them scale their business, without requiring them to be acquired or become part of Microsoft.

The program offers:

• Azure credits – Startups can receive up to $150,000 in Azure cloud credits over four years, enabling them to build, deploy, and scale their solutions on Microsoft’s cloud platform.
• Mentorship and expert guidance – Participants gain access to a network of Microsoft engineers, business experts, and fellow founders who provide tailored advice and technical support.
• Co-selling opportunities – Through collaboration with Microsoft’s global sales teams, startups can reach new enterprise customers, accelerate revenue growth, and expand internationally.
• Networking and go-to-market support – Startups are connected with investors, customers, and Microsoft’s global partner ecosystem, helping them grow faster and gain market traction.
• Technical support and training – Members receive 24/7 Azure Standard Support, in addition to technical training, architecture consultations, and on-demand workshops.
• Productivity tools – Free access to professional-grade tools such as GitHub Enterprise, Microsoft 365, and Visual Studio Enterprise, helping startups streamline development and operations.

This program is not aimed at acquiring startups or integrating them into Microsoft, but rather at building partnerships and staying at the forefront of innovation, particularly in fields such as AI, cybersecurity, and SaaS.

Mergers & Acquisitions (M&A)

M&A is a method of innovation where a company acquires or merges with another firm to gain access to its technologies, products, talent, or market share. 

Companies use M&A for several reasons:

• Accelerate access to new technologies without waiting for in-house R&D.
• Acquire talent (also called "acqui-hiring") with specialized knowledge or innovation capabilities.
• Enter new markets or industry verticals by acquiring established companies or high-growth startups with proven capabilities and market presence.
• Remove competitive threats by absorbing potential disruptors.

One notable case is Google’s acquisition of DeepMind, a British AI startup.

Rather than just partnering with DeepMind, Google fully acquired the company to bring cutting-edge AI research in-house.

This move significantly enhanced Google's innovation capabilities in AI, which are now central to products such as Google Search, Google Assistant, and its cloud offerings.

Closed Innovation

Closed innovation happens entirely in-house. All research, development, and idea generation are done within the company’s teams and departments.

This model gives businesses full control over their intellectual property and innovation process.

However, it can also be slower and less adaptable, as it doesn’t benefit from the wide range of insights and resources that external partnerships offer.

Here are strategic models of closed innovation:

Intrapreneurship

Instead of sticking strictly to their job descriptions, encourage employees to come up with new ideas, try out creative solutions, and take ownership of projects.

This approach helps you stay innovative and adaptable, without needing to create entirely new startups.

At Google, the famous "20% time" policy let employees spend one-fifth of their workweek on side projects they were passionate about. This intrapreneurial freedom led to the creation of major products like Gmail and Google Maps.

Pro Tip

Fear of failure is a significant barrier to innovation within organizations. In fact, 85% of executives acknowledge that fear often or always impedes innovation efforts in their organizations.

The KICKBOX Intrapreneurship Program empowers employees to explore innovative ideas in a risk-free environment, making innovation accessible and engaging through a gamified approach.

The program helps participants track their progress and understand each step of the innovation journey, making it easier to turn ideas into action.

KICKBOX is available to all employees, regardless of their role, department, or experience level, encouraging broad and inclusive participation across the organization.

It fosters a growth mindset by encouraging experimentation, developing new skills, and boosting confidence, even when initial ideas do not succeed.

Dedicated Innovation Teams

Dedicated innovation teams are internal groups within a company that focus solely on creating new ideas and driving innovation.

LEGO's Future Lab is a strong example. This internal innovation team was established to envision the future of play and develop innovative, forward-thinking products and experiences. Working separately from LEGO's core product teams, Future Lab was behind creative ideas such as LEGO Fusion and early explorations into augmented reality play.

Knowledge Management Systems

Did you know that companies that actively manage employee ideas are 3.5 times more likely to outperform their peers in innovation?

Idea platforms make this possible by providing employees with a structured space to submit, develop, and collaborate on ideas across departments.

Instead of ideas getting lost in inboxes or meetings, everything is stored in one place, visible, trackable, and open for feedback.

Pro Tip

You never know where an innovative idea can come from within your company.

With the rready platform, anyone in your organization can share new ideas and transform them into meaningful solutions.

The platform empowers your employees to share their ideas, collaborate with colleagues, and refine concepts together, fostering a culture of open innovation.

In the Ideas section on the platform, employees can explore existing ideas, contribute their perspectives, and collaborate as a team to further develop them.

Corporate Innovation Challenges

Now that you have a clear idea of what corporate innovation is, let’s look at some common challenges that can get in the way:

1. Outdated systems – Innovative ideas often struggle to gain traction when they clash with outdated systems and rigid structures.

2. Lack of clear strategy – Without a well-defined strategy, innovation efforts can drift off course and fail to support long-term business goals.

While 83% of companies see innovation as a top priority, only 30% are actively planning to refresh their innovation strategy, leaving many efforts directionless.

3. Managing risk and failure – A low tolerance for failure can push companies toward safe, incremental changes instead of bold, disruptive innovation.

Globally, just 35% of innovation projects succeed, emphasizing the need for better risk management and a culture that accepts failure as part of the process.

4. Resource allocation – Innovation often loses out when companies prioritize short-term results and core operations over long-term growth.

Top innovators proactively reallocate 6–30% of their R&D budgets annually, while less agile firms struggle to free up resources.

5. Cultural resistance – Deep-rooted traditions and resistance to change can quietly undermine even the most promising innovation initiatives.

A poor organizational culture hinders innovation in 78% of companies, making cultural transformation just as important as strategy.

Note

If you want to learn how to overcome these challenges, check out our article on corporate innovation best practices.

How Can rready Help You

rready delivers flexible, AI-powered innovation solutions that empower organizations to effortlessly generate, capture, refine, and implement ideas, from concept to execution.

Our tailored approach simplifies the ideation process, fosters cross-functional collaboration, and enhances employee engagement by equipping teams with the tools and support needed to turn ideas into real-world impact.

Our suite of solutions includes:

• rready Idea Management – Our platform helps your team capture, organize, and elevate the best ideas through a customizable, easy-to-use workflow.

From detailed descriptions to AI-enhanced visuals, files, feedback, and smart categorization, every idea gets the clarity and visibility it needs to shine.

• KICKBOX Intrapreneurship – The KICKBOX Intrapreneurship Program gives your employees the tools and structure to turn bold ideas into real impact.

It builds a culture of innovation by empowering everyone to contribute creatively and take ownership of new solutions.

At its core is the KICKBOOK, a practical guide packed with tools, tips, and insights that support each step of the journey.

• Innovation Management – Our Innovation Management solution brings everything together in one platform to manage your entire innovation portfolio.

It’s built to support real results with secure access, smart AI suggestions, and campaign tools that align with your goals.

rready now includes advanced AI features that supercharge ideation, collaboration, and decision-making throughout the innovation journey:

• Language-Agnostic Search & Content Translation – Search in the language you’re most comfortable with while our AI automatically translates content behind the scenes.
  It’s easy for everyone to understand and contribute, regardless of the language they speak.
• AI Agents – Leverage intelligent, context-aware AI agents that offer personalized support, generate tasks, and provide real-time suggestions.
  These agents can automatically fill fields, deliver relevant feedback, and seamlessly adapt to your organization’s workflows, making work faster, smoother, and more innovative.
• Similarity Search – Quickly uncover related ideas to avoid duplicates and spark richer, more connected collaboration.
• AI-Generated Images – Elevate your presentations with stunning, AI-generated images that add clarity and visual impact to your ideas.
• Inspire Feature – Admins can invite multiple users to join a campaign and provide them with a set of pre-generated ideas tailored to the company, the challenge, and each user's skills, lowering the barrier to participation and helping spark inspiration.

With rready’s solutions, your teams are empowered to effortlessly generate, capture, prioritize, and implement fresh ideas. Break through common barriers to corporate innovation and turn bold visions into real, measurable impact.

Book a demo today to see how AI-powered solutions can help you streamline and manage your corporate innovation!

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