Innovation Centres Take Root in Asia

22 May 2018

Innovation hubs and teams have long been a way for companies to break away from traditional processes without disrupting the core business. Recently, however, large-scale innovation centres have been opening across the region at a rapid rate. But what do these centres really do — and how do they deliver value?

There is no one-size-fits-all solution, but all the centres are investments in navigating the changing marketplace, exploring new technologies and digital transformation and aligning with non-traditional partners. Unilever, for example, has a co-located startup incubator in Singapore. Volkswagen and Johnson & Johnson have built standalone facilities in China and elsewhere, meanwhile, and service providers such as Accenture, which has a Digital Hub, also in Singapore, are offering in-house innovation tools for clients.

“Innovation centres should provide people with the freedom to communicate, collaborate and experiment in nimble ways,” says Sam McMorran, group creative director, Imagination China, which has designed numerous innovation centres throughout the region. “But in order for the platform to be successful, there has to be a trusted conduit that allows truly innovative ideas and prototypes to flow rapidly into the broader company structure and business strategies.”

Beyond the physical space

Time has shown it is these processes more than the physical space that will ensure the success of a centre. Organisations who build one and expect spontaneous innovation as a result will likely be disappointed.

Barbara Guerpillon, head of Unilever Foundry South East Asia & Australasia — and a former entrepreneur herself — spent two years building the company’s Foundry startup collaboration initiative in the region before establishing LEVEL3, a co-working space located in Unilever’s Southeast Asia headquarters in Singapore in February 2017.

“You first need to build the basis of how your organisation is going to engage with startups and then you can potentially think about a physical way of doing it,” she says. “Foundry is a platform for startups to connect with Unilever, and our role in the organisation is to understand where potentially there is way of doing things differently, where there is space for experimentation and trying new technologies to answer a very specific brief given by a brand or a function.

“You do not need a physical space to have a programme like Unilever Foundry working successfully. LEVEL3 is successful because the model of engagement we have with startups is successful, and that model has been built over the last four years.”

LEVEL3 has since grown to house 60 startups (from just 15 at launch) and 170 members, as well as ecosystem partners including Microsoft, Deloitte and, just last week, WPP. It recently appointed a Strategic Advisory Board populated by prominent regional executives from the likes of Google and Lazada.

It has also held more than 110 events and education sessions attended by over 6,500 participants. In the early days, Guerpillon used the quarterly Foundry Club events as an indicator of performance, and when regular attendance grew from 25 to 200 she began looking at the number of subsequent briefs received from Unilever brands and functions.

One such brief was answered by the startup Try&Review, a web solution helping beauty and FMCG brands create authentic product reviews and real-user content to drive product desirability and sales. “Through Unilever Foundry, Try&Review worked with Unilever’s brand team LUX on a pilot programme,” says Guerpillon. “The pilot was a success and after moving to LEVEL3 Try&Review rapidly expanded its business with other Unilever brands.”

Open house

Outside the startup model, Imagination’s McMorran says some of the most successful innovation centres today take a B2H approach, providing a flexible space for internal and external user groups to come together facilitated by the latest technology. “It’s about an honest and transparent approach to breaking down the barriers to innovation,” he says. “Create a space that becomes part of your company culture and welcomes humans into the process of innovation, whilst using innovative technology to inspire, educate and help them drive the business forward.”

Shiseido has several well-established facilities in Japan, Beijing, Shanghai and Singapore, largely concerned with R&D as well as market research. However, its new 17-storey Global Innovation Center (GIC), opening in Yokohama in December, will take a very different approach.

“The biggest feature of the GIC is that it has an open communication space,” says Satoshi Hirota, a spokesperson for Shiseido. “Generally, R&D facilities are closed off from customers but at the new GIC, researchers and customers will be able to communicate directly on the first and second floors. This way, researchers and marketers can utilise feedback from customers in product planning and development.”

As well as cutting-edge research facilities, the new GIC will also incorporate a brand museum, a library stocked with thousands of beauty books and digital content and a presentation space on the future of beauty. It hopes to integrate “knowledge and expertise as well as communicating with diverse people”.

Local insights

Johnson & Johnson has one of the largest innovation footprints in the region, stemming from the 2014 opening of its Asia Pacific Innovation Center (APIC) in Shanghai — which now has offices in Japan, Korea and Singapore — as well as partnering offices in Seoul, Brisbane and Melbourne.

“The APIC combines Johnson & Johnson’s global reach and expertise with unique local capabilities and an open innovation model that involves a robust exchange of ideas and resources with innovators to support their success in creating breakthrough healthcare solutions,” says Jieying Wu, head of communications for Johnson & Johnson Innovation Asia Pacific.

“By being both locally embedded but also able to tap into Johnson & Johnson Innovation’s global network, APIC has the rare combination of scale and agility, and of scientific and commercial expertise needed to transform an early idea into game-changing products.”

The company will also open ‘JLABS @ Shanghai’ in the second quarter of 2019, a 4,400-sqm facility expected to house up to 50 startups. Before that, a new design lab — its first outside New York — will open as part of a major new Singapore office later this month.

Johnson & Johnson Innovation also has strategic partnerships with academic institutions, and organises several events each year including the Asia Pacific Innovator Summit and regular Quickfire Challenges to attract early-stage innovation.

As well as drawing in the best and brightest, these events are an important positioning tool. “Being seen as a catalyst that pulls people together to innovate on meaningful things positively benefits perceptions of the brand,” says McMorran.

Consumers at the core

In an industry such as automotive that is facing fundamental changes, innovation centres have a major role to play. Volkswagen Group built three “Future Centers” last year, large-scale innovation facilities in Potsdam, California and Beijing.

“Our group strategy, Together 2025, has a key target to develop our company from a hardware producer to a provider of hardware, software and mobility services,” says Andreas Brozat, spokesperson for innovation and digitalisation, global group communications at Volkswagen Group. “That means our transition is about not losing the focus on producing great cars, but adding the software and mobility service provider aspects to it.”

The centres bring together designers, user experience experts, AI specialists, smart city authorities, startup scouting and engineering. “We are putting users at the centre of all our considerations and are more curious to learn from them than we would have been in the past when user experience (UX) was not yet established. It used to be more driver focused — first the car was produced and then in the third quarter of production a focus group was established. In the Future Centers, it’s more focused on the life of the people and what they need from much earlier in that process.”

This includes inviting new user groups such as the elderly, differently abled and children to the centres — all who are not usually part of the individual transportation market — to inform the design of self-driving vehicles.

“In the past, we had a vehicle design department working on its own,” says Brozat. “In our Future Centers, we are adding another discipline [to the process] so these designers work hand-in-hand with UX colleagues. We have changed our structure so throughout the group we bring these two disciplines together — and we do this globally.”

Future Center Asia officially opened in January and will focus on three key areas: the electrification of mobilisation, autonomous driving and the shared economy. “Chinese consumers are very technology-driven and way more open and established concerning digitalisation,” says Brozat, “It’s good to have an ear on the ground there as well as it being a hugely relevant market.

“So what is the best way of getting dual transition done? I don’t know, but trying is relevant,” says Brozat. “Whatever the centres bring, whether inspiration or a solution that can play an integral role in future cars and plans, the key thing is that we crack it and are not missing the boat.”

Article originally published by Campaign Asia- Pacific.

Innovation Centres Take Root in Asia