Oliver Wick, who works in BMW’s Munich office, has a rather unusual job title: as a “Technology Scout”, he is responsible for scanning the weird and wonderful world of emerging technologies, and assessing which ones have the potential to improve the automotive giant’s business model.
His yearly targets? In his own words, “to bring innovation to BMW”. And Wick is only one part of a strategy developed by BMW over the years to foster the discovery of new technologies across the business, in an attempt to constantly stay one step ahead of the competition.
The automotive company has ‘Technology Offices’ spread out across the world, where experts like Wick are tasked with identifying relevant innovations and generating trend reports for use cases ranging from car production to smart city services.
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To assist their work, BMW’s teams are equipped with a ‘Tech Radar’ — custom-built software that collects and analyses data from R&D, patents, markets, venturing and other sources, to provide a full-spectrum view of emerging technologies of interest and of their level of maturity.
Once a promising innovation has been identified, technology scouts are expected to network with startups and universities working in the field and to come up with proof of concepts. Once these have been green-lighted, relevant technologies can be transferred to the central business.
To expand the tech discovery process, BMW has also created a ‘Startup Garage’ to encourage smaller organisations with a good idea to submit their pitch, with the promise of a contract with the automotive company for those selected.
And even internally, BMW has deployed an accelerator program. “If someone in the purchase department has a great idea that has nothing to do with purchasing, we want to accelerate that,” Wick tells ZDNet.
Wick is currently working on incorporating quantum computing into BMW’s business model — a technology identified via the tech radar in 2017 that has piqued the interest of the company’s highest-level experts. BMW is now organising a crowdsourcing challenge to invite startups and researchers to submit ideas for quantum algorithms that could eventually solve problems like sensor placement on vehicles or material deformation during production.
“Our objective is to find the hidden companies, organisations or individuals that we wouldn’t find with traditional means,” says Wick.
BMW is not the only company to invest in the discovery of new technologies. Another example is energy manufacturer Enel, which currently boasts ‘Innovation Hubs’ in 10 cities across the world, all designed to discover startups and small organisations whose technology could eventually serve Enel’s own business interests.
Among the numerous partnerships established by the energy company features Form Energy, for instance, a startup that is developing low-cost and long-duration batteries that can be combined with renewable energy sources. Enel is actively investing in Form Energy and providing the startup with guidance to grow its product.
SMEs and innovation
BMW and Enel are examples of huge companies with deep pockets, which have committed significant budgets to technology discovery. But smaller companies should not rule out investment in innovation.
“I don’t think small and mid-market companies have the luxury to do the sort of R&D element that a company like BMW can afford,” Philip Dawson, vice president at Gartner Research, tells ZDNet. “But they are more agile because they don’t have the same legacy and they don’t have the same scale of complexity. They are more like the speed boat than the oil tanker.”
For Dawson, it doesn’t matter how big a company is: every company should set aside a budget for technology discovery. This is because regardless of size, investing in innovation is what could make the difference between a company that stagnates and one that grows.
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Budgeting for the near-term and aiming for measurable returns on investment (ROI) remains key. But Dawson argues that organisations should also keep in mind the “far horizon”, which comes with higher risks but much better rewards.
“You have to understand and track what’s cool, what’s emerging, and then see where you can innovate,” says Dawson. “The next horizon is higher-risk, but it will really take you to a new business opportunity and enable real growth.”
For example, a recent study carried out by the Harvard Business Review analysed data from a multinational oil company to assess whether the firm’s efforts in R&D had paid off. After reviewing 7,000 drilling projects, examining the career history for over 30,000 engineers and holding interviews with managers and executives, the researchers found that the company had spent billions of dollars on R&D every year and generated almost 10,000 patents. This led to drilling costs falling by 15%, saving an average $90 million per year per subsidiary.
Yet many companies struggle to see the value of dedicating money to exotic-sounding technologies — think quantum computing, but also hydroponics or 3D printing, all the way to self-healing materials or smart textiles.
Looking at long-term trends, researchers have found that since the 1980s, US companies have reduced spending on basic, exploratory science and engineering. A more recent survey by KPMG stressed that innovation teams within organisations are still small, with 38% of respondents reporting that their teams were smaller than 10 people.