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Smaller, more flexible companies are often an overlooked source of new products and ideas. Partnering with start-ups and fostering a culture of innovation can help businesses successfully achieve their digital transformation and develop new areas of growth.
Collaboration to facilitate transformation
The internet is driving growth and employment across the world and MENA is no exception. In the region, start-ups offer hope amid declining oil revenues and the need to diversify the economy.
According to the World Bank, smaller organisations are one of the main engines of job creation in the region. "Micro-start-ups - firms less than five years old and with a maximum of four employees - accounted for 92 percent of net job creation in Tunisia between 1996 and 2010 and 177 percent in Lebanon between 2005 and 2010," the institution notes.
Furthermore, start-ups can help larger organisations in the region make smoother transitions to the digital economy. Aiman Kabli, founder of eleva8or.com, a platform helping start-ups prepare for the investment journey, sees many reasons why companies should collaborate with start-ups.
"First of all, start-ups are at the leading edge of innovation and technology in contrast to the outdated technology or practices of many larger businesses," he says.
"Secondly, start-ups usually offer a very modest price for their innovations compared to other providers, helping companies source products or services a lot cheaper than they would from larger corporations."
He notes that such collaborations often have wide-reaching benefits. "It also helps communities at large because when big companies acquire services from start-ups or collaborate with them it helps them grow. Then they can start creating more jobs, create more innovation and the cycle will go round."
Enabling new business ideas
To meet and collaborate, finance leaders and start-ups can use different methods. Some large companies have start-ups "scouts" that can help them find smaller companies they can buy out or collaborate with.
Open innovation spaces, marketplaces and contests also offer an opportunity for start-ups and finance leaders to meet and greet.
The UAE and the rest of the GCC hold many technology and innovation conferences and workshops.
"These events offer larger companies the chance to see which start-ups are offering what. Often there will be a pitch event or competition where start-ups can pitch their ideas and the companies can listen," notes Kabli.
"If they are interested then they can invest in the start-up or pick it up somehow. There is a lot going on in the area of smart cities, the Internet of Things or in fintech, healthcare, education etc., as well as hardware like robotic technology or artificial intelligence."
Mutual benefits
No department in a business is immune to the need to transform, and finance leaders can play an important role in this by supporting innovation initiatives.
"Regardless whether it's fintech or in-house corporate finance, usually a start-up brings new methods and new technologies that a company can adopt and usually it's disruptive technology. So this means it challenges the old ways of doing things," Kabli remarks.
Rather than avoiding, ignoring or even trying to compete with start-ups, larger businesses should look at what they offer. "At the end of the day, the new technology often wins in the market," he says.
Although such initiatives will undoubtedly help, Kabli says different mechanisms like the cloud can also play a very important role in collaboration.
Oracle offers cloud accelerator programmes to start-ups and provides them with cutting-edge technology, mentoring with business experts, and access to customers, partners and investors.
"They give start-ups a lot of support to grow, free services, and get them introduced to other companies on the cloud so that all of their data and the collaboration that results from that can sit on the cloud," Kabli points out.
© Oracle 2017
