Technological innovation is not a new development or concept. During the past decade, however, a “powerful wave” of innovation based on digital platforms and applications has emerged and has now become synonymous with the tech industry, according to a report from the Boston Consulting Group (BCG).
The report states:
“Investors and companies are now looking for the next source of deep technological innovations (deep tech), which will fuel the next industrial revolution. Deep-tech innovations are defined as disruptive solutions built around unique, protected or hard-to-reproduce technological or scientific advances.”
Deep-tech firms usually have a strong research base. They’re also able to create value by building new solutions, “not only by disrupting business models,” the report noted. However, these firms face certain challenges because they’re “advancing the technological frontier,” the report explains.
A survey performed by Hello Tomorrow and BCG (which obtained feedback from over 400 deep-tech firms) found that the challenges that respondents identified most often included:
- Lengthy time-to-market (27%),
- High capital intensity (25%),
- Technology risk and complexity (17%),
- Yet-to-be-developed commercial applications (14%)
The report recommends that these challenges may be addressed by going beyond the basic goal of acquiring funding. Deep-tech companies also need to focus on issues such as market access, hiring workers that have the required technical expertise to do their job, and also consider recruiting qualified business professionals.
The report further notes that Universities, the public sector, business angels, and VCs might have important roles to play in the development of deep-tech firms. However, corporates—whether they’re midsize, large, or enterprise-size businesses — are “the only potential partners that can meet all of the startup’s needs, combining technical, industrial, and commercial visions and skills” the report claims.
“That fact explains why 97% of deep-tech startups are interested in collaborating with corporate partners. Simply applying the same methods and thinking that corporates and startups use when they partner to develop digital platforms and apps, however, will not work.”
The report recommends that corporates must take into account the different challenges and requirements of deep-tech companies if they’re interested in forming mutually beneficial business relationships.
The startups may benefit from the corporate participants’ industry knowledge of strategy, marketing, and communication. Corporations, meanwhile, can help out by mentoring young talent and can promote or encourage “internal cultural change toward entrepreneurship.”
As stated in the report, examples of these types of initiatives include Telefonica’s Open Future Program and Accenture’s Fintech Innovation Lab.
As mentioned on the company’s official website:
“The [Accenture] Fintech Innovation Lab is a highly competitive, 12-week program that helps early to growth-stage enterprise technology companies refine and test their value proposition with the support of the world’s leading financial service firms. This … program is an opportunity for the participating start-ups to work with potential future customers, validate propositions, gain valuable insights into the financial services industry and develop strong relationships with senior industry executives.”
Entrepreneurs focused on the latest technologies for financial services, especially those related to AI, machine learning (ML), cryptography, security, data and analytics and, blockchain and distributed ledger—are chosen by Accenture to take part in its extensive program.