Significant parts of the innovation value chain are outsourced to service providers and the proportion of those external activities has constantly grown over the last decades.
Depending on the industry and the actual stage, up to 70% of innovation activities are externalised and the fully virtual start-ups depend totally on the execution muscle of service providers.
While most managers are fully aware of this trend, not all of them contemplate the consequence – outsourcing has a tremendous leverage on innovation success. Superior outsourcing performance will drive innovation performance, while any outsourcing deficiencies will be poorly tolerated. As long as innovation outsourcing continues to grow, this leverage will become more and more important.
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