Acquisition is the New Innovation
This excerpt is taken from a post I wrote that was featured yesterday on Boston.com. I discuss legacy technology companies and how they are buying innovation today and in years to come.
(L)ess than one in five global companies deems itself “very effective” at breakthrough innovation, according to a Bain Consulting survey. At current scale, it’s difficult for tech giants to grow faster than the overall economy, but shareholders demand more than the typical two to five percent growth each year. Furthermore, for these companies to stay relevant and maintain their market positions, they need new product offerings. The demand for growth and innovation creates tremendous pressure for IT incumbents, which aim to achieve both mandates though the acquisitions of smaller, emerging companies.
In essence, tech giants don’t create innovation – they buy it. Big pharma companies have been doing this for decades, but in recent years it’s the enterprise IT incumbents that have relied upon mergers and acquisitions as much as they do research and development to drive growth and stay relevant. Even Google, long considered one of the most innovative and imaginative companies in the world, uses acquisition as a key driver of growth.
To read my post in its entirety, click here.