Lessons learned from large corporations' roles in innovation ecosystems
Formerly known as General Electric, GE announced this January that it is moving its corporate headquarters from suburban Connecticut to downtown Boston. In the Boston Business Journal's recent coverage of the story, GE Chairman/CEO Jeff Immelt said: "GE is a $130 billion high-tech global industrial company, one that is leading the digital transformation of industry. We want to be at the center of an ecosystem that shares our aspirations."
Formed by the 1892 merger of Thomas Edison’s company with Massachusetts' own Thomson-Houston Electric Company, GE is not alone in considering the Boston area as a world-class hub of innovation. Earlier this month, Bloomberg confirmed what many of us who live and work here know to be true: Massachusetts is the most innovative state in the nation.
So what does GE's move to Boston mean for the Commonwealth, for the City, and in particular for our innovation ecosystem? And what might GE like to know, even at this stage, as it thinks through how best to leverage the innovation and entrepreneurship that drive much of the activity in Greater Boston and beyond?
Let us start with defining the expression "innovation ecosystem" that has been so widely used in the discussions of GE's decision. In our work at MIT, we define an innovation ecosystem as the connections among five key stakeholders: entrepreneurs (of course), universities (as you'd expect), and risk capital providers (beyond just VCs)--but also with key roles for government and large corporations.
In our research on, and teaching about, such ecosystems around the world, we emphasize that an ecosystem relies upon the collective actions that these stakeholders take to contribute and share resources (talent, ideas, infrastructure, money, connections).
Our work also shows that such innovation ecosystems are complex and sometimes fragile things. Many places in the world wish to emulate such an innovation hub, but few pull off the alchemy necessary to launch or sustain such ecosystems. As such, we have been increasingly highlighting (e.g., in BetaBoston,) the importance of a certain innovation diplomacy within and among the various stakeholder groups, recognizing the interests of the other parties, and taking actions that find opportunities for mutual long-term benefit.
So what might GE like to know now, as it re-locates/returns to Greater Boston and engages with our innovation ecosystem?
As background, it's worth noting that our ecosystem has long been home to many types of innovation--historically as a hub in America's industrialization in the early nineteenth century, through the rise of high tech, combining both hardware and software, and now with biotech since the 1980s, and clean tech, robotics, and connected hardware later.
With its history of innovation-driven entrepreneurship (IDE) strengthened by World War II (and the Rad Lab), our emphasis has been on collaboration with corporations, the government, and universities. Indeed, compared to Silicon Valley, Boston has emphasized the role of all parties--including the government and corporations--in its success, and given less of a privileged role to entrepreneurs and VCs alone.
What might we say to GE's leaders about the key stakeholders in this ecosystem? First, entrepreneurs here do indeed want to engage with large corporations. But not necessarily for their financial capital; rather they are interested in mentoring, in access to managerial talent, and in specialized testing equipment to see how effective their ideas really are. In this regard, GE’s announcement that it will establish a "GE Digital Foundry" for "co-creation, incubation, and product development with customers, startups, and partners" is encouraging. GE might also consider engaging further with Boston's established entrepreneurial communities: GE leaders have met MassChallenge, but should also get to know the Cambridge Innovation Center, the more specialized Greentown Labs group of clean tech entrepreneurs, the new Roxbury Innovation Center, and the hardware wizards at Bolt and beyond.
Greater Boston's 55 universities are also amazing collections of talent, where today’s students and faculty--rather than wanting corporations just to arrive at the annual "recruiting fairs"--want to hear about inspiring challenges, and to work together with corporate leaders to "hack" problems and build solutions. They want to have exciting summer internships and joint research problems, those that move ideas from inception towards impact--the very definition of innovation.
And, at MIT and beyond, students and faculty want engagement that brings the wisdom of experience to today's hands-on problem solving. Indeed, experiences like MIT's Global Founders Skills Accelerator (GFSA) is one of many ways to engage with start-up teams pioneering areas from robotics to health-tech devices. Many others are being highlighted by MIT's new Innovation Initiative.
So GE: welcome to Boston, and its innovation ecosystem. You're about to be a huge local player (as #8 on the Fortune 500) but you're also joining a community of innovators with its own unique culture, and an ecosystem of stakeholders committed to using innovation to solve important global problems. As we all explore what it means to have such a big new kid on the block, we look forward to engaging with you, and sharing insights from what has worked (and not worked!) for large corporations, both here and beyond, in terms of benefitting from and contributing to an innovation ecosystem, without undermining what makes it such a hub of innovation and entrepreneurship.
Professor Fiona Murray is the William Porter Professor of Entrepreneurship, MIT Sloan's Associate Dean for Innovation, and Co-Director of the MIT Innovation Initiative. Fiona regularly teaches in MIT Sloan's Executive Education programs, including the Advanced Management Program (AMP), and the MIT Regional Entrepreneurship Acceleration Program (REAP).
Dr. Phil Budden is a Senior Lecturer at MIT Sloan. He served for many years as Britain’s Consul General to New England, and now teaches about innovation ecosystems, especially the role of governments and corporates. He also teaches in the new program, Innovation Ecosystems for Leaders: Delivering Sustainable Competitive Advantage, the Advanced Management Program (AMP), and the MIT Regional Entrepreneurship Acceleration Program (REAP).