On July 5th, 1994, a gentleman named Jeff Bezos, decided to capitalize on the immense power of the internet and create an online bookstore. Fast forward 23 years and today, that humble bookstore “Amazon” stands at a market cap of $340 billion dollars and is more valuable than some of the largest Fortune 100 brick-and-mortar retailers put
Together!

It’s been a familiar story where a disruptive, outside entity comes in and completely dethrones the incumbent using a mix of technology, innovation and agility to create a product in tune with the needs of consumers. There’s no doubt that the future of new businesses, both in India and globally lies in disrupting old businesses, and in response, stodgy old industries and traditional companies must disrupt or be disrupted. In this changing landscape of technology led innovation, incumbent industry leaders are soon realizing that the only way to protect themselves from being rendered irrelevant by the new-kid-on-the-block is to work with startups rather than against. Interestingly so, these innovations are no longer being driven by corporate headquarters in Minneapolis or London, but in India!

The rise of the GICs:
The Indian IT/ITES industry grew exponentially over the last few decades leveraging cost and talent benefits with adirect workforce of ~4 Million, generating total revenue expected to touch $146B in 2016. As the complexity of work being ‘outsourced’ to India began to increase, global enterprises began recognizing Bangalore and India not just as service providers but as a source of strategic talent and there started the trend of setting up their own ‘Global In-house Centers’ or GIC’s. Today, the world’s leading global conglomerates have their own GIC’s in India(growing significantly from only 180in 2000 to over 1000 today) including every one from the world’s largest retail chains (Target, TESCO, Walmart etc)to FMCG(Nestle, Johnson &Johnson), Banks(Citibank, Societe Generale, Morgan Stanely) and even well-known consumer brands such as Victoria’s Secret and Apple.

GIC’s and the Startup Revolution:
With the growth of GIC’s in India, a big trend in work being done in Bangalore, for example, is very deep, sophisticated, integrated business-impacting capabilities. ANSR Consulting, the world’s leader in developing GIC operations out of Bangalore, for instance was alone responsible for setting up and running over 20 Fortune 100 companies in Bangalore with a focus on establishing capabilities related to analytics, mobility, omnichannel and marketing out of India. As more and more quality work began to shift to India, there was also a parallel rise of India as one of the world’s fastest growing startup eco-systems, giving India the enviable position of hosting companies at both ends of the business spectrum in the same city! Could startups then be the solution these GIC’s need to fast-track innovation for their respective industries?

Collaboration vs. Competition
The increasing strategic importance for corporates to engage with the startup community is the opportunity we saw at Kyron Global and over the last five years, we work alongside corporate to understand and define startup engagement initiatives. Our clients include Fortune 100 retail global giants, financial services and banking. From our experience of running these programs, here are a few successful models corporates can follow to engage with startups:

1. Corporate Accelerators: Accelerators are a structured, time-bound, cohort-based program which run in batches and with specific themes. For corporates with clear interest areas and an availability of domain expertise to mentor and guide the startups, this is an excellent proposition. Some of these corporates included Target, Victoria’s Secret, Swiss Re, the Tata group and more. Others with similar programs in India include Airbus, YES bank, Axis Bank, SwissRe and more.

2. Corporate Incubators and Labs: One of our clients today is one of the world’s largest home innovation companies and they setup one of their most advanced Innovation Labs in Bangalore last year with a focus on developing the next generation of innovative solutions for an ages-old industry. In such R&D scenarios, a lab or an incubation facility is perfect to work alongside startups with cutting-edge technologies and build together. Companies such as Qualcomm and Intel are also known to work along side startups in similar setups.

3. Corporate Funds: Another way that corporates are increasingly building a footprint in the startup space is by directly investing into startups, which have complimentary solutions to their respective industries. Today, many corporates boast corporate funds to invest early into innovative startups including companies such as Cisco, Intel, Novartis and GE have corporate funds. In India, the Times of India group runs an active VC fund with Brand Capital. Many real estate companies are today funding innovations in this space as well.

4. Startup Engagement Programs: A few corporates have also taken a direct engagement route by regularly conducting “hackathons” or specific outreach events by partnering with ecosystem partners to call-out specific problem statements and invited interested startups to identify or develop solutions for them.

Today, as companies like ANSR are bring GICs to India, companies like Kyron Global are helping global enterprises stay ahead of the game by increasing their access to innovation. Because time is of the essence, and innovation is going to be a key driver, there has never been a better time to be a startup looking to solve global problems and to be a global corporate industry leader looking to be the next biggest disruptor to it’s own existing strengths and capabilities.