More and more companies are scouting on green innovations lately. Are they out of ideas or simply wants to help outsiders to boost inventions? Either or, it comes as a welcome relief in the business industry especially entrepreneurs seeking funding,
Companies on a race towards innovation
Companies have tried different approach for business growth and beating competition. Most have patented anything that might be commercialized; others adopted sampling products and step by step introduction to products; some spend millions in advertising. The list is just so long, however internal methods seems to be lacking the “market value” that is why most businesses scout for innovations outside their wall.
Take for instance General Electric’s Ecomagination Challenge, a contest looking for companies, inventors, and students with the best clean-technology ideas and come together to building the next generation power grid to meet the needs of the future. GE [NYSE:GE] along with Emerald Technology Ventures, Foundation Capital, KPCB and Rockport Capital are investing $200 million with the best idea entered in the contest.
Among the 1000 contestants vying for the price is Tom Quinn, a former president of networking software Novell and inventor of the motion-controller technology behind Nintendo’s Wii. His entry is a portable system converting food straps and other waste into ethanol. According to Quinn a partnership with GE could boost the E-Fuel market. Beyond funding, GE may also offer work to work collaboratively with its researchers to produce or distribute a product and be included on its $40B green energy business.
GE’s Ecomagination Challenge is only one of a dozen similar programs sponsored by corporations scouting for new business ideas and in turn giving opportunities to green entrepreneurs. Pepsi Co. [NYSE:PBG], Cisco [NASDAQ:CSCO], and Netflix [NASDAQ:NFLX] have launched same competitions to identify innovations outside offering partnership opportunities and cash prizes. Other companies have the same concept but with different approach. The likes of Procter and Gamble [NYSE:PG], Starbucks [NASDAQ:SBUX], Dell [NASDQ:DELL] and many more have encouraged posting of suggestions of new products thru their websites.
However, skeptics fear that the trend in outside innovation will threaten secrecy and an issue on intellectual property leakage. But the bottom line is since competitive pressure is high on the market; companies need to exert all effort including the use of both internal and external innovation strategies to gain edge.
