Asia overtakes Europe as destination for Innovation Centre Investment

| News alerts

Paris - Asia has for the first time overtaken Europe in its number of innovation centres built and operated, with the region now host to nearly a third (29%) of all such centres globally. So strong is Asia’s growth that it could soon overtake the US as the biggest hub of innovation centres, if it continues to grow at the same rate. This is the finding of a new global report, ‘The Spread of Innovation Around the World: How Asia Now Rivals Silicon Valley as New Home to Global Innovation Centres’, by Capgemini Consulting’s Digital Transformation Institute in collaboration with Fahrenheit 212, part of the Capgemini Group and in partnership with Brian Solis of Altimeter, a Prophet company.

Europe’s share of innovation centres slipped 4 percentage points between July 2015 and October 2016 – from 30% to 26%, prompted by an uncertain economic environment and regulatory challenges. In the same time period, Silicon Valley’s share of the world’s total innovation centres also dropped, from 18% to 14%. Innovation centres, typically physical sites located in major global technology hubs, are increasingly being set up by large organisations as they seek to contend with digital disruption and transform themselves. When operated successfully, innovation centres allow large organisations to leverage an ecosystem of startups, venture capitalists, accelerators, vendors, and academic institutions in order to develop breakthrough products and solutions. The report suggests Asia’s increasing influence is due to a culture of technology-driven innovation, talent and Government support. This has led to heavy investment not only from Asian companies, but from Europe and US-based giants too.

Eric Turkington, Director at Fahrenheit 212, part of the Capgemini Group, said: "We are witnessing a rapid changing of the guard for global investment in innovation centres. The US and Europe have traditionally been viewed as dominant forces in innovation and technology but Asia could soon surpass the US for number of innovation centres built and operated. Moreover it is clear that funding alone is not enough — the success or failure of any innovation centre hinges on how effectively it taps into the surrounding ecosystem, and the role it plays in driving a broader corporate innovation strategy."

Asia’s emergence as a leading hotbed of innovation is underscored by its position as a world leader in patent applications, a key indicator of technological and scientific breakthroughs. The region now accounts for over half (56%) of the world’s total patent grants. During the last decade (2005-15), Europe’s share of global patent grants has fallen from 24% to 13%1.

"Innovation centres are corporate attempts at thwarting digital disruption. And companies seeking to out-maneuver disruption usually become the disruptors in their space. With Asia’s dominance in this edition of our research, it’s clear that innovation is becoming globally democratised. Furthermore, by tracking associated technology trends, the focus on AI suggests that the future of corporate innovation will realise new business models, products and processes emanating out of Asia with global effects" said Brian Solis, co-author and principal analyst at Altimeter, a prophet company.

The study also found:

  • There is a trend towards innovation centres focusing on a single technology or advancement, with this particularly true of Artificial Intelligence. The number of new centres focused on AI is up from one in July 2015 to nine in October 2016, with nearly half of these based in Asia (four)
  • Bucking the wider European trend, the UK’s share of Europe’s innovation centres has consistently risen since July 2015 by 7 percentage points.
  • In the most recent six months of data (March-October 2016), Asia saw rapid growth in its number of innovation centres (35%), with Europe much more restrained (12%). Five of the top 10 cities for innovation centres are located in Asia.

To download a copy of the report, visit: https://www.capgemini-consulting.com/resources/rise-in-asia-innovation-centres

- ENDS -