This analysis explores how leading corporations in East and Southeast Asia partner with deep-tech start-ups to foster innovation and address global challenges. It delves into mechanisms like corporate venture capital, accelerators, and strategic partnerships, showcasing key challenges, strategies, and trends in this unique regional landscape. The insights underscore the significance of effective governance, cultural awareness, and risk management to ensure successful collaborations.
- 🚀 Defining Deep Tech: Deep tech encompasses transformative technologies based on scientific discoveries or engineering innovations, offering significant advancements over existing methods. These include artificial intelligence, quantum computing, biotechnology, and robotics, aimed at solving fundamental societal and environmental challenges. Unlike general tech, deep tech solutions require longer development cycles, high capital investment, and specialized expertise.
- 📈 Growing Investment Trends: Investments in deep-tech start-ups surged from $15 billion in 2016 to over $60 billion in 2020, with corporations increasingly embracing start-up collaborations. The weight of deep-tech ventures in corporate venturing portfolios is expected to grow by 71% in the next five years. Companies are leveraging these partnerships to access cutting-edge innovations and maintain competitiveness in rapidly evolving markets.
- 🌍 Regional Adoption Highlights: East and Southeast Asia feature diverse corporate venturing landscapes. While countries like China and Japan lead with robust ecosystems, others like Vietnam and Indonesia are in earlier stages. The region’s adoption of corporate venturing mechanisms, such as venture capital and incubators, averages 57%, higher than Latin America’s 40% but lower than the United States' 90%.
- 💡 Challenges in Collaboration: Corporations face several obstacles in collaborating with deep-tech start-ups, including difficulty in evaluating complex technologies, a misalignment of short-term corporate goals with the longer timelines of start-ups, and fragmented regulatory systems. Internal silos and top-down management approaches also hinder creativity and responsiveness to new ideas.
- 🔧 Innovation Governance Models: Companies adopt varied governance models, including owner (centralized control), coordinator (independent teams), and hybrid systems, to manage cross-regional and departmental collaboration. Effective governance reduces redundancy and ensures alignment between internal R&D efforts and external innovation ventures. Regular meetings, shared databases, and unified strategies enhance integration.
- 🧩 Role of Regional Fragmentation: The diverse languages, currencies, legal systems, and cultural practices across East and Southeast Asia create unique challenges for corporations. For example, regulatory inconsistencies and cultural preferences for hierarchical decision-making can slow down innovation adoption. Companies need localized strategies to overcome these barriers while maintaining global integration.
- 📊 Risk Management Strategies: Risk perception varies significantly across corporate venturing mechanisms. Start-up acquisitions and venture capital are seen as high-risk, while hackathons and scouting missions are considered lower-risk. Corporations can mitigate risks by building trust with internal teams, emphasizing early success stories, and focusing on use cases that directly address pressing corporate needs.
- 🔍 Technology Valuation and Bias: Technology evaluation is a critical challenge for deep-tech collaborations. R&D teams, while technically adept, may be biased towards internal solutions. To ensure impartial evaluations, companies should engage multidisciplinary teams or external experts. Joint accountability between corporate venturing and R&D teams fosters more balanced assessments.
- 🌟 Case Studies from Leaders: Leading corporations showcase the potential of deep-tech collaborations:
- Toyota partnered with to develop autonomous driving technologies, gaining expertise in AI without exclusive technology ownership.
- Samsung invested in quantum computing start-up IonQ, positioning itself at the forefront of advanced computation.
- Lenovo collaborated with CosMX to enhance battery technologies, combining advanced materials research with market-ready innovations.
- 📖 Recommendations for Leader: To maximize the benefits of corporate venturing, companies and policymakers should:
- Streamline regulations across the region to support cross-border innovation.
- Encourage partnerships between corporations, start-ups, and research institutions to close the funding gap for deep-tech projects.
- Prioritize training programs to upskill teams in technology evaluation and governance.
- Balance short-term performance metrics with long-term investment in groundbreaking technologies.
