In today’s fast-moving business world, companies are under more pressure than ever to keep innovating. Whether it’s launching new products, improving operations, or reaching new markets, innovation is the key to growth and survival. But here’s the big question: should you build everything in-house or look outside for help?
1. 60% of internal innovation projects fail to meet their original objectives.
Internal innovation is often seen as the heart of a company’s growth. But the reality is, 60% of these projects never hit their goals. Why does this happen so often?
The main issue is resource allocation. Most internal innovation projects begin with good intentions, but over time, priorities shift. Budgets are cut, key people leave, and the team loses focus.
Without dedicated support and ongoing leadership involvement, internal projects struggle to keep up momentum.
Another common problem is lack of alignment. Teams might build a solution that doesn’t fit what the market wants.
They may not test assumptions early or gather feedback fast enough. As a result, the final product might be impressive on paper but useless in practice.
So, what can you do?
Start by setting clear goals. What are you trying to solve, and for whom? Don’t just focus on features—focus on outcomes. Then, create a cross-functional team that includes marketing, sales, and customer success, not just engineers. This helps keep the customer in mind throughout development.
Also, put milestones in place. Regular check-ins help catch problems early. If something isn’t working, you can pivot quickly rather than waste months heading in the wrong direction.
Finally, encourage a culture where failure is okay—but learning is required. When a project misses the mark, don’t bury it. Analyze what happened, and share the lessons.
2. Companies using external partnerships see 33% higher innovation success rates.
Working with outside partners can open doors that internal teams can’t unlock on their own. It’s not just a theory—companies that form external partnerships experience 33% higher success rates in innovation.
Why does this work?
External partners bring in fresh ideas and new skillsets. They often operate outside the limitations that internal teams face. While your internal team may be tied up with daily operations, partners have more freedom to explore bold solutions.
They also bring different perspectives. Maybe they’ve tackled similar problems in other industries. Their insights can challenge your assumptions and speed up breakthroughs.
To use this to your advantage, be strategic about who you partner with. Don’t just look for the biggest name—look for someone who fills a gap you have. Maybe you need technical expertise, or maybe you need someone with access to a specific customer segment.
Once the partnership is in place, set shared goals. Make sure everyone knows what success looks like and how it will be measured. Transparency is key. Without it, miscommunication can ruin even the best partnerships.
Also, assign someone to manage the relationship. This person should keep communication flowing, resolve conflicts quickly, and make sure the partnership stays on track.
In the long run, treating your partner as a true collaborator—not just a contractor—will lead to better results for both sides.
3. Only 25% of R&D projects launched internally reach commercialization.
It’s one thing to develop a product in the lab. It’s another to bring it to market. Only 1 in 4 internal R&D projects ever make that leap.
This stat highlights the gap between invention and execution. Many R&D teams focus too much on the tech and not enough on how the product will actually be used. They fall in love with the solution and forget about the customer.
The key issue? Market validation. R&D teams often don’t engage real users early enough. They might wait until the final prototype is ready, only to find out that customers don’t care or won’t pay for it.
The fix is simple but powerful—get feedback early and often. Use minimum viable products (MVPs) to test ideas fast. Talk to potential users. Watch them use your product and note where they struggle. This will save you months of wasted development.
It also helps to involve marketing and sales from the beginning. These teams understand customer behavior. Their insights can shape the product into something that people actually want to buy.
Finally, think beyond launch. Does the product align with your existing channels? Can your team support it after launch? Products that don’t fit into your current operations usually don’t survive long.
4. External partnerships reduce time-to-market by an average of 40%.
Speed is everything in today’s market. If you wait too long to launch, a competitor might beat you to it. That’s why external partnerships can be such a game-changer—they cut time-to-market by 40% on average.
This happens because external partners often have ready-made solutions. Instead of building everything from scratch, you can license technology, tap into existing platforms, or co-create with someone who’s already halfway there.
Another factor is agility. External firms don’t have the same red tape or internal politics. They can move fast, test ideas, and iterate quickly.
To get the speed boost, plan early. Know what part of your project can benefit from outside help. Is it design? Development? Manufacturing? Once you know, find a partner with a track record of delivering on time.
Also, align expectations upfront. Define your timelines, milestones, and roles. Who’s doing what? When? This avoids last-minute surprises.
Legal frameworks also matter. Use clear contracts to manage IP rights, timelines, and deliverables. The faster you iron out the details, the faster you can get moving.
Speed doesn’t mean rushing. It means working smart. And the right partner can help you do just that.
5. 78% of executives say collaborations with external firms boost innovation.
Executives know the value of collaboration. In fact, 78% say that working with outside firms boosts their company’s innovation.
Why? Because partnerships create a space for new thinking. When teams from different backgrounds work together, they challenge each other’s assumptions. This leads to better solutions.
Partners also bring resources. Maybe your company lacks the tech stack or talent to build something new. Your partner can fill that gap and help you move faster.
But success depends on how you manage the relationship. Don’t just throw a project over the fence. Instead, work side-by-side. Create joint teams, hold regular check-ins, and keep the lines of communication open.
Also, give your team the freedom to explore. Innovation dies when people feel micromanaged. Trust your partner—and your team—to make smart decisions.
Finally, measure impact. What did you learn from the collaboration? What would you do differently next time? These lessons will make future partnerships even more effective.
6. Internal R&D investments yield a 15% average ROI, compared to 28% via external alliances.
Return on investment (ROI) is one of the clearest ways to judge innovation efforts. Internal R&D typically yields around 15% ROI. That’s not bad—until you compare it with the 28% ROI companies get through external alliances.
Why such a big gap?
One major reason is cost. Internal innovation often involves long development cycles and heavy overheads. Teams might work on projects for months or even years before seeing any real results. That’s a long time to wait for a return.
External alliances, on the other hand, let you share both the risk and the cost. You’re not shouldering the full burden alone. Plus, external partners might already have a working product or prototype. That cuts down both time and expenses.
To get more from your internal R&D, focus on early validation. Don’t wait for perfection. Get to a prototype quickly, and test it with real users. Small wins early in the process help justify continued investment—and help you avoid pouring money into dead-end ideas.
When working externally, structure your alliances with ROI in mind. Make sure both sides have skin in the game. That way, everyone is motivated to perform. Set clear deliverables and timelines. And track performance along the way—not just at the end.
Mixing internal innovation with external partnerships can be a smart move. It gives you a broader set of tools to boost ROI while managing risk effectively.
7. 45% of internal innovations face market-fit challenges post-launch.
Almost half of all internally developed products face trouble after launch because they don’t quite match what the market wants. This stat is a wake-up call.
Internal teams often work in a bubble. They rely on assumptions and internal expertise instead of direct input from users. Even with the best intentions, this disconnect results in products that miss the mark.
So how do you improve market fit?
Start by listening. Involve your customers early in the innovation process. Don’t wait until the final product is built. Conduct interviews, surveys, and usability tests. Ask customers what problems they’re facing—and how your product could help.
Next, focus on value, not features. Too many teams build flashy solutions that don’t actually solve real-world problems. Make sure your product addresses a true pain point, not just a theoretical need.
Also, don’t ignore your competitors. What’s already in the market? How are users responding to it? Use this information to position your product more effectively.
Finally, launch small. Use beta tests, pilot programs, or limited releases to gather real-world data before scaling up. This allows you to fix issues early and make smart adjustments.
Internal innovation isn’t doomed—but it needs tighter alignment with what people truly want.
8. 67% of successful product innovations involve at least one external partner.
Here’s a big insight: most successful product innovations don’t happen in isolation. Nearly 7 out of 10 involve an external partner. That’s not just a coincidence—it’s a pattern.
Working with outside partners brings in new capabilities. You can tap into technical skills, industry know-how, or market access that you don’t have in-house. And that can be the difference between failure and success.
So how do you find the right partner?
Start with your goals. What are you trying to achieve? Maybe you need speed, or maybe you’re breaking into a new market. Your partner should help you reach that specific goal.
Then look for alignment. Do you share similar values and work styles? Can you trust them to deliver? Trust is everything in a collaboration. Without it, progress grinds to a halt.
Once you begin, build a joint roadmap. Define roles, responsibilities, and milestones. And check in regularly. Strong communication keeps both sides accountable and builds momentum.
Partnerships aren’t just about plugging holes. They’re about co-creating something better than either side could have built alone.
9. 80% of open innovation projects achieve at least partial success.
Open innovation is the idea of sourcing ideas from beyond your organization. And it works—80% of open innovation efforts deliver results, even if only partial.
That’s a powerful number, especially compared to the high failure rates of closed, internal-only projects.
Why does open innovation work so well?
It taps into a bigger talent pool. Instead of relying only on your team, you can bring in ideas from startups, universities, freelancers, or even customers. This variety leads to more creative solutions.
Also, open innovation moves faster. You’re not starting from scratch—you’re building on what others have already done. That saves time and increases your odds of success.
To make open innovation work for you, be intentional. Don’t just post a challenge online and hope for the best. Define what you’re looking for, and create a clear process for selecting and integrating the best ideas.
Make it easy for outsiders to work with you. Offer clear incentives, communicate your expectations, and respect intellectual property rights.
And most importantly, be open to being challenged. The best ideas often come from unexpected places.
Open innovation isn’t about giving up control. It’s about expanding your possibilities.
10. Internal innovation efforts have a 35% average success rate across industries.
Across industries, internal innovation has a success rate of just 35%. That means two-thirds of ideas never reach their full potential.
This stat tells us that while internal innovation can work, it’s not easy. It takes structure, discipline, and a lot of patience.
Why do most internal projects fall short?
Often, it comes down to execution. Teams get stuck in planning. They over-engineer solutions. They delay launches because they want everything perfect. Meanwhile, the market moves on.
There’s also the issue of isolation. Internal teams may not get enough feedback or external input. As a result, they develop products that don’t match market needs.
So what can you do?
First, keep things lean. Use short cycles to build, test, and learn. Don’t wait for a big launch. Small iterations help you learn fast and adjust quickly.
Second, get buy-in from leadership. Without support from the top, projects often lose steam. Make sure innovation has a champion who can remove roadblocks and keep things moving.
Finally, set clear success metrics. What does “success” look like? Revenue? Adoption? Customer satisfaction? Define it early, and measure it throughout the project.
Internal innovation can succeed—but it needs the right environment to thrive.
11. 55% of external partnerships fail due to cultural misalignment.
More than half of external partnerships fall apart because of cultural differences. That’s not just company culture—it includes communication styles, decision-making processes, and even work ethics.
Let’s say you’re a fast-moving tech startup, and your partner is a large, conservative corporation. You value speed and risk-taking. They prefer structure and careful planning. If you don’t address those differences early, frustration builds. Deadlines are missed. Trust breaks down.
So how do you avoid cultural misalignment?
Start by acknowledging it. Before signing any contracts, sit down and talk about how each team works. Ask: How do you make decisions? How do you handle conflict? What does a typical workday look like?
Next, set shared values for the partnership. These don’t have to match your internal culture—but they must guide how you’ll work together. Values like transparency, accountability, and flexibility can go a long way.
Also, build bridges. Assign liaisons from each team to communicate regularly and smooth over differences. Even simple things like using the same tools or agreeing on response times can help you stay aligned.
Finally, be patient. Cultural alignment doesn’t happen overnight. But with mutual respect and open communication, you can create a shared rhythm that works for both sides.
12. Cross-industry partnerships improve innovation success by 22%.
Sticking to your industry feels safe—but it can also keep you stuck. Companies that form partnerships across industries see a 22% bump in innovation success.
Why does this work?
It brings in fresh thinking. A logistics company might team up with a retail brand and learn a completely new way to manage inventory. A healthcare firm might partner with a tech company to build smarter patient tools.
These unexpected connections lead to unexpected breakthroughs.
To start, look for industries that share similar problems. Maybe you both struggle with customer engagement or data security. Even if your end products are different, you can collaborate on solutions that benefit both.
Be ready to speak a new language. Every industry has its own jargon and assumptions. Take the time to learn your partner’s world—and explain yours clearly.
Also, be open to redefining success. Your goals might be different, but that’s okay. The key is to find a shared outcome that benefits both parties.
Cross-industry partnerships aren’t always easy, but they often lead to bigger, bolder innovation.
13. Firms with external innovation networks innovate 26% faster.
Speed matters. And firms that build strong external innovation networks move 26% faster than those who go it alone.
This happens because networks give you more options. If one path hits a dead end, another opens. You’re not relying on a single team or a single idea.
Innovation networks might include suppliers, startups, universities, or even your customers. The more connections you have, the easier it is to find what you need—whether it’s a new technology, a test user, or a fresh perspective.
To build a network, start small. Reach out to a few key players in your space. Attend industry events, join innovation forums, or host a roundtable.
Then nurture those relationships. Share your goals, offer value, and stay in touch. The goal isn’t to get something immediately—it’s to build trust and stay top of mind.
Also, make space for your team to engage with the network. Give them time and resources to attend meetings, collaborate on projects, and bring new ideas back to the company.
An innovation network is like a garden. The more you tend to it, the more it grows—and the more it gives back.
14. 62% of companies with high innovation output rely on both internal and external models.
Most high-performing innovators don’t pick a side. They blend internal innovation with external collaboration. In fact, 62% of top innovators use this hybrid approach.
Why does it work?
Because it gives you the best of both worlds. Internal teams know your business, your culture, and your customers. External partners bring new capabilities, fresh ideas, and added speed.
Together, they create a powerful engine for innovation.
To make the hybrid model work, start by defining roles. What types of innovation should stay internal? What’s better handled outside? For example, core product features might be developed in-house, while experimental tech could be explored with a partner.
Also, align your strategy. Your internal and external efforts should point in the same direction. If your internal team is building a product for small businesses and your partner is targeting enterprises, you’ll end up pulling in opposite directions.
Use shared platforms and tools to streamline collaboration. Whether it’s a product roadmap, a Slack channel, or a shared knowledge base, keep everyone on the same page.
And don’t forget to celebrate shared wins. Recognizing both internal and external contributions builds morale and strengthens the partnership.
When done right, the hybrid model isn’t just a compromise—it’s a competitive advantage.
15. 48% of internal-only innovation pipelines stall due to resource constraints.
Almost half of all internal-only innovation pipelines slow down or stop completely because they run out of resources—time, money, or talent.
This is a common challenge, especially in small or mid-sized companies. Innovation is exciting at first, but as day-to-day operations take over, teams struggle to maintain momentum.
To avoid this stall-out, start by budgeting for innovation like you would for any other critical function. Don’t treat it as a side project. Give it a clear owner, set KPIs, and review progress regularly.
Also, build flexibility into your resourcing. When a new idea shows promise, be ready to shift budget or team members to support it. This kind of agility can keep your pipeline moving even when things get tight.
Another option is to tap into external resources. You don’t have to do it all in-house. Contractors, freelancers, or strategic partners can fill skill gaps and add capacity when needed.
And finally, be honest about bandwidth. Don’t overcommit your team. It’s better to focus on one or two strong projects than to spread resources too thin across five.
Resource constraints are real—but with careful planning, they don’t have to stop innovation in its tracks.
16. 70% of tech companies report greater returns from co-development with startups.
Startups may be small, but they pack a punch. According to recent insights, 70% of tech companies say they get higher returns when they co-develop products with startups, rather than building everything in-house.
Why does this approach work so well?
Startups bring bold thinking and speed. They’re not weighed down by layers of approvals or legacy systems. They take risks and push boundaries. This energy can breathe new life into established companies.
At the same time, tech firms offer what startups often lack—scale, funding, market access, and deep industry knowledge. When these two forces combine, the result can be powerful innovation with strong market viability.
To get the most out of startup partnerships, be selective. Don’t just go for hype. Look for startups with products that align with your goals. Their vision should complement yours—not compete with it.
Set up a clear co-development plan. Who owns what? What are the timelines? How will you handle customer feedback and updates? Answer these questions before diving in.
Also, support the startup. Give them access to tools, data, or mentorship that can help them succeed. Remember, when they win, you win too.
Treat the partnership like a joint venture—not a contract. That mindset leads to better trust, better products, and better returns.
17. External partnerships increase innovation diversity by 37%.
Diverse perspectives fuel creativity. When you partner with people outside your company, you instantly widen your viewpoint. That’s why external partnerships lead to a 37% increase in innovation diversity.
What does “innovation diversity” really mean?
It means generating a wider variety of ideas. Instead of falling into the same thought patterns, you open the door to new angles, fresh insights, and different ways of solving problems.
For example, a finance firm working with a design agency might discover more user-friendly ways to present complex data. Or a healthcare company teaming up with a gaming studio could reimagine how patients engage with treatment plans.
To boost diversity, don’t just stick with the obvious partners. Look beyond your industry, geography, or customer base. The more different your partner is, the more you’ll learn.
At the same time, create space for listening. Be open to ideas that challenge your way of thinking. Innovation happens when you step outside your comfort zone.
Also, be aware of internal barriers. Sometimes teams reject outside ideas too quickly. Set a tone of curiosity and openness. Encourage team members to explore new concepts before deciding what won’t work.
Innovation thrives on variety. And external partnerships are one of the fastest ways to get it.
18. 64% of product breakthroughs come from joint ventures or licensing deals.
Many people think breakthroughs only come from internal geniuses. But the truth is, 64% of major product breakthroughs happen through joint ventures or licensing agreements.
This makes sense. Joint ventures combine the strengths of two organizations. One might have the technology. The other has the market. Together, they move faster and reach further than they could alone.
Licensing is another smart move. Instead of building something from scratch, you license proven tech or intellectual property. This saves time, reduces risk, and often costs less than full development.
To tap into this strategy, start by scouting. What technologies, products, or ideas already exist that could enhance what you’re building? Many game-changing features are already out there—you just need to find them.
Next, approach licensing with clarity. Know what you need and what you’re willing to give. Some deals involve revenue sharing. Others are flat fees. Either way, make sure the agreement aligns with your growth goals.
If you’re pursuing a joint venture, focus on trust. Pick a partner you can collaborate with closely over time. You’re not just sharing resources—you’re sharing vision and responsibility.
Breakthroughs don’t always come from the inside. Sometimes, the best move is to build on what already works.
19. 30% of internal innovations are abandoned during prototyping.
Innovation is exciting—until it gets hard. That’s why 30% of internal innovations get abandoned during the prototyping phase. This is the point where ideas meet reality, and many teams walk away.
Why does this happen?
Often, teams hit unexpected roadblocks. Maybe the tech doesn’t work like they thought. Maybe costs rise. Or maybe user testing shows that no one wants the product. It’s discouraging.
But here’s the thing: failure at the prototype stage isn’t bad—it’s a sign that your process is working. You’re testing before spending too much.
The key is to make prototyping fast and cheap. Don’t spend months building a perfect version. Aim for quick, rough versions that let you test one key thing—functionality, desirability, or usability.
Also, create space for failure. If a prototype doesn’t work, don’t kill the whole project. Ask: what did we learn? Can we pivot? Can we combine this idea with something else?
Set up a clear process for moving from idea to prototype. Assign small, cross-functional teams. Give them the tools and authority to build and test fast. Review progress regularly and help them unblock issues quickly.
Most ideas hit a wall. But if you treat the prototype phase as a learning phase—not a make-or-break moment—you’ll come out stronger on the other side.
20. Firms using hybrid (internal + external) models see 2.3x higher innovation success.
There’s a clear winner in the innovation race: hybrid models. Firms that combine internal efforts with external partnerships see innovation success rates that are more than double—2.3 times higher—than firms that stick to one path.
Why does this combo work so well?
Internal teams know your systems and strategy. They build ideas that fit your goals. External partners bring outside insights, speed, and scale. Together, they create balance—ambitious ideas with real-world practicality.
In practice, a hybrid model might look like this: your internal team builds a core platform, and an external agency develops a specialized module. Or your team defines the customer need, and a startup helps deliver the solution.
The trick is to coordinate, not compete. Your internal and external teams need shared tools, timelines, and priorities. If they operate in silos, you’ll end up duplicating work or clashing on direction.
To manage the model, appoint a central innovation lead. This person should oversee all projects—internal and external—and make sure everything stays aligned.
Use the hybrid model as a growth engine. Let external partners expand your horizons. Let internal teams keep you grounded. When both sides pull together, you get faster, better, and more sustainable innovation.
21. M&A-based innovation success rate is 50%, higher than internal R&D (30%).
Mergers and acquisitions aren’t just about growth—they’re also a powerful tool for innovation. With a 50% success rate, M&A-based innovation outperforms traditional internal R&D, which averages around 30%.
Why is that?
When you acquire a company, you’re not just getting their product—you’re getting their people, technology, and market insights. It’s like plugging in a ready-to-run engine instead of building one from scratch.
M&A gives you speed. If a company already has a solution your customers need, acquiring it can fast-track your innovation goals by months or even years. You also sidestep the trial-and-error phase that comes with internal development.
That said, success isn’t guaranteed. Half of M&A efforts still miss the mark. Culture clashes, poor integration, and misaligned goals can turn a promising deal into a costly mistake.
To increase your odds, start with a clear strategic fit. The company you’re acquiring should fill a gap in your innovation roadmap—not just your revenue sheet. Think: Do they have capabilities we lack? Do they open new markets or solve customer problems we can’t yet?
Next, plan your integration early. Don’t wait until after the deal closes. Map out how teams, tools, and workflows will merge. Assign leaders to manage change and keep everyone aligned.
Also, respect what made the target company successful. If you strip away their culture or processes, you risk losing the very value you paid for.
Used wisely, M&A can be one of the most efficient paths to innovation success.
22. External collaborations with academia show 42% higher patent output.
Collaborating with universities and research institutions often pays off—especially when it comes to intellectual property. These partnerships boost patent output by 42%, making them a rich source of technical innovation.
Academic partners bring deep expertise. They work on cutting-edge problems that businesses may not have the time or focus to tackle. Their labs, students, and research grant networks offer high value at relatively low cost.
But beyond the patents, you also gain credibility. Working with a top university can enhance your brand and open doors to more partnerships or funding opportunities.
To make these collaborations effective, start by identifying mutual goals. Academics may be interested in publications and long-term impact. You may be looking for commercial application. Find the overlap and set clear expectations.
Also, protect your interests. IP agreements should be settled up front. Clarify who owns what and how any resulting tech can be used, licensed, or sold.
Don’t treat academic partners like vendors. Instead, involve them in your process. Invite them to team meetings. Share your vision. Help them understand the market challenges their research can solve.
If you nurture these relationships, you’ll not only get more patents—you’ll get smarter, faster, and more innovative along the way.
23. 85% of pharma innovations involve external research partners.
In the pharmaceutical industry, innovation isn’t a solo act. A massive 85% of pharma breakthroughs involve some form of external research partnership.
Why is this number so high?
Drug development is complex, expensive, and time-consuming. It can take over a decade and billions of dollars to bring a new drug to market. No single company can afford to carry that burden alone—not if they want to stay competitive.
External research partners, including biotech firms, universities, and clinical labs, help share that load. They bring specialized knowledge and tools that accelerate discovery, testing, and regulatory approval.
To apply this model beyond pharma, think about how your company can use external expertise to tackle hard problems. What parts of your innovation process are slow, expensive, or risky? Who’s already working on those issues?
Build partnerships that are structured for mutual benefit. The external team should see value in the relationship, whether it’s funding, access to data, or potential licensing income.
Keep your internal team involved. They need to understand the work being done externally so they can guide integration, testing, or commercialization down the road.
Partnerships don’t just lighten the load—they multiply the results.
24. Internal innovation in large firms is 50% slower than in startups.
Big companies have many strengths—but speed isn’t always one of them. In fact, internal innovation at large firms moves 50% slower than at startups.
That’s a serious disadvantage in a fast-moving market.
Why the delay?
Large organizations often have layers of approval, risk-averse cultures, and rigid processes. Even great ideas can get bogged down in bureaucracy.
Startups, by contrast, are built for speed. They make decisions quickly, iterate fast, and are comfortable with risk. This agility lets them move twice as fast from idea to execution.
So how can larger firms pick up the pace?
First, create space for innovation. Build small, empowered teams that operate like startups inside your company. Give them autonomy, budgets, and permission to break rules.
Next, remove red tape. Do you really need five levels of approval to launch a pilot? Streamline your innovation pipeline so ideas can move faster from concept to customer.
Also, reward speed. Celebrate quick wins and fast learning—not just perfect results. If teams fear failure, they’ll slow down to play it safe.
Finally, look outside. Partnering with startups can inject speed into your process, giving your team access to fast-moving talent and fresh ideas.
The faster you innovate, the faster you grow. Don’t let size slow you down.
25. 90% of CEOs say external innovation is key to future competitiveness.
The message from the top is clear—90% of CEOs believe that external innovation will be essential to staying competitive in the future.
This isn’t just a trend. It’s a mindset shift.
CEOs are realizing that no company, no matter how large, can innovate fast enough or broadly enough on its own. Markets are moving too fast. Customer expectations are evolving too quickly. The only way to keep up is to collaborate.
External innovation means more than outsourcing. It means actively working with partners—startups, customers, universities, and even competitors—to co-create value.
So what can you do to align with this thinking?
Start by embedding external collaboration into your strategy. Make it part of your innovation KPIs. Create budgets and teams dedicated to scouting and managing partnerships.
Encourage your leadership team to build external networks. The stronger your connections, the more opportunities you’ll find for breakthrough ideas.
Also, create a culture that values openness. If your team sees external partners as threats or distractions, innovation won’t flourish. Help them see the upside—and involve them in shaping partnerships from the beginning.
The future belongs to companies that can think beyond their walls. And the CEOs who know this are already one step ahead.
26. Internal R&D budgets are 2.5x more likely to be cut in downturns than external partnerships.
When economic uncertainty hits, many companies tighten their belts—and internal R&D is often one of the first areas to feel the pressure. In fact, R&D budgets are 2.5 times more likely to be slashed during downturns than external partnership budgets.
Why does this happen?
Internal innovation is seen as a long-term play. The returns take time, and in times of crisis, leaders tend to prioritize short-term survival over long-term bets. Teams get reassigned, projects get paused, and the innovation pipeline dries up.
External partnerships, on the other hand, often come with shared risk, fixed costs, and clearer deliverables. They’re easier to budget, easier to pause or pivot, and often tied directly to revenue-generating activities.
To protect internal innovation in tough times, tie it more closely to business outcomes. Don’t treat R&D as a sandbox—connect it to growth, customer retention, or operational efficiency. When innovation is clearly solving today’s problems, it’s less likely to get cut.
At the same time, use downturns to strengthen external collaborations. Partners may be more open to working together when budgets are tight. Share tools, co-invest in solutions, or explore joint go-to-market strategies.
And remember, some of the greatest innovations have emerged during crises. If you can keep your pipeline alive while others pull back, you’ll come out stronger on the other side.
27. Partnerships with customers yield a 34% improvement in innovation outcomes.
Sometimes the best innovation partner isn’t a tech firm or a university—it’s your customer. When companies co-create with their customers, innovation outcomes improve by 34%.
This happens because customers know their pain points better than anyone. They can tell you what works, what doesn’t, and what they wish they had. Their insights help you build something that’s useful, usable, and desirable.
So how do you bring customers into your innovation process?
Start with listening. Interview them. Watch them use your products. Understand their journey—not just what they do, but why they do it. Look for the friction points.
Then, involve them in shaping solutions. Share prototypes, test concepts, and invite them to feedback sessions. Some companies even form “customer councils” to act as ongoing innovation advisors.
Don’t just talk to your happiest customers. Include skeptics, too. They’ll push you to improve in ways that cheerleaders might not.
Be transparent. Show customers that their input is valued and used. When people feel heard, they become more loyal—and more willing to share even better insights next time.
Innovation becomes more powerful when it’s built not just for customers—but with them.
28. 40% of internal innovations miss launch deadlines.
You can have a great product, but if it doesn’t launch on time, it can still fail. Unfortunately, 40% of internal innovation projects miss their scheduled launch deadlines.
This delay has ripple effects. It throws off marketing plans, confuses customers, and gives competitors time to catch up. It also frustrates teams and eats into budgets.
Why do delays happen?
Scope creep is a big culprit. As internal teams work, they often keep adding features, refining designs, or trying to make the product perfect. Before long, the deadline slips.
Another issue is lack of ownership. Without a clear project leader, decisions stall. Teams wait for approvals, miscommunicate, or work at cross-purposes.
To stay on track, set realistic timelines—and stick to them. Break large projects into smaller phases. Launch a minimum viable product (MVP), then build from there.
Assign a dedicated innovation lead for each project. This person should have the authority to make decisions, allocate resources, and remove roadblocks.
Also, plan for the unexpected. Build buffers into your schedule, and do regular check-ins to catch slippage early. It’s easier to correct a small delay in month two than a big one in month eight.
Deadlines create urgency. And urgency fuels momentum. If you want your innovation to make an impact, launch timing matters just as much as the idea itself.
29. Licensing-in technology increases innovation adoption rates by 31%.
Building new technology in-house takes time. But when companies license existing technologies instead, adoption rates improve by 31%.
Why? Because licensed technologies often come with proven success. They’ve been tested, refined, and used in the real world. That makes customers more comfortable adopting them—and reduces your time to revenue.
Licensing also frees up your internal teams. Instead of reinventing the wheel, they can focus on integrating and improving the tech to suit your specific needs.
To use this strategy, start by scanning the market. What tools, platforms, or patents could enhance your products? Look beyond your industry—you might find a hidden gem in an unexpected place.
Evaluate licensing deals carefully. Understand what rights you’re getting. Can you modify the tech? Resell it? What kind of support or updates are included?
Also, plan for integration. Just because a tool works well elsewhere doesn’t mean it will plug into your systems perfectly. Test thoroughly, train your teams, and prepare to adapt your processes if needed.
Licensing isn’t a shortcut—it’s a smart strategy. When done right, it boosts your speed, lowers your risk, and improves your chances of a successful launch.
30. 73% of market-leading innovations involved outside contributors.
Here’s a final number to drive it all home: nearly three out of four market-leading innovations were developed with help from outside contributors.
This could be a partner, a startup, a university, or even a group of customers. The point is—great ideas rarely happen in isolation.
Outside contributors expand your vision. They bring in skills, data, technologies, and perspectives that your internal team may not have. They see things you don’t—and challenge you to think bigger.
To harness this, start building your “innovation village.” Create open channels for collaboration. Encourage your team to attend external workshops, collaborate on joint papers, or participate in shared experiments.
Recognize the contributors. Give them credit. Celebrate joint successes. This builds trust and keeps them invested in your success.
And build internal systems to manage and integrate external input. You don’t want great ideas falling through the cracks. Assign someone to track, manage, and champion these collaborations.
In the end, innovation is a team sport. And the winning teams are the ones that know how to play beyond their own walls.
Conclusion
Innovation doesn’t happen by accident. It takes clear goals, the right resources, and a thoughtful approach to collaboration. As we’ve seen from the 30 stats in this article, relying on internal teams alone often limits both speed and success. External partnerships—whether with startups, universities, customers, or other companies—offer a powerful way to boost your results.
