Partnership approach to innovation

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When a company is looking to come up with a new innovative product or service to take its business to a new level, many creative and less-than-creative approaches are often used. However, there is one approach I have noticed in large companies that is becoming more popular. It is the approach of setting up a subsidiary company that is less restricted and more open to outside investors and partnerships.

BMW recently announced more details of such a plan. It is called the BMW i brand and its main goal is to come up with innovate technologies for cars. They are launching the initiative under a company called BMW i Ventures and gave it $100 million to find partnerships that will result in new ideas and technologies for cars. They are looking mainly at alternative energy systems for the cars, as well as, advanced technological features that drivers would use in the car. I use this as an example simply because it’s the latest company to announce such a plan. This trend of setting up a flexible subsidiary company is one that is growing and can be found in a bunch of large companies today.

It differs from the older, but still very common approach of putting a small team of engineers in a secret facility to work on a new product. That is not to say that approach is bad, it obviously works for companies like Apple and Lockheed Martin. However, to come up with world changing innovations like the next fuel source that most cars will use it often takes more than just one company working on it in secret.

It is an approach that we are likely to see more of as globalization continues connect companies and people more and more. It seems to be one of the best ways to harness the strengths from various people and companies in order to reach a mutually beneficial objective. I would not be surprised to see great new innovations arise from such approaches over the next 5-10 years.