A guide to developing and building a global innovation center

The world is evolving, and the nature of work is becoming dynamic. Today businesses need to leverage the best talents from all over the world to be ahead of the competition. Building a global innovation center is critical in this process.

A Global Innovation Center (GIC), also called a Global In-house Center or Captive Center is an offshore shared services facility owned and operated by the enterprise to source high-quality and scalable IT and business services to support its business.

A global innovation center is a cross-disciplinary venture created to combine uniquely:

●    innovative processes from industry-leading experts
●    novel, emerging, and proven data analysis technologies
●    the economically-attractive global services delivery model that is revolutionizing the IT industry

These ingredients provide the foundation for a new class of services aimed at unlocking the knowledge in vast data stores for solving some of the most difficult research and strategy challenges facing enterprises.

GICs have experienced tremendous growth in recent years across a broad range of industries—outpacing the growth rate of outsourcing services—with India being home to most GICs.

But building a global innovation center is a challenging feat.

Here’s a guide to building and developing a global innovation center, including the basic principles and technologies needed.

Main principles of innovation center development 

Innovation centers are actually – or comparatively – young as places of concentration of companies connected to the output of hi-tech products; the oldest is just over forty years old. Nevertheless, analyzing their history allows us to see four large stages in their development.

They can be specified as follows:

• concentrating resources,
• transforming the economy of the region where the innovation center is located, and forming the innovation ecosystem,
• innovation and technological breakthrough
• innovation center maturity

Certainly, such periodization is generalizing and cannot be regarded as obligatory. Nevertheless, it can be useful as a reference system for innovation center projects created under similar conditions, or at least conditions that do not differ drastically.

Moreover, in all innovation centers that proved their effectiveness, every stage solved a strictly defined set of top-priority managerial problems, the successful solution of which was necessary to enable working on the subsequent stages.

Basic technologies of global innovation center development 

Despite the diversity of challenges, an innovative enterprise faces at different stages of its development, the technologies for solving them – the sort of ‘building blocks’ of the innovation infrastructure are divided into six major blocks

• incubation of innovative start-ups
• attraction of foreign funding
• development of effective technological park infrastructure
• organization of horizontal relationships among the innovation system participants;
• Branding and PR
• formation of the innovation center’s management authorities

Each of these technologies is made up of several others – simpler ones. A successful innovation center is a result of a combination of these blocks.

The path forward

GICs are an attractive option for companies seeking to advance their capabilities in exploiting big data for competitive advantage. Unlike traditional IT operations and back office support services—where predictability, accuracy, and stability are paramount and which are well served by current sourcing models—digital technologies that support the front office and drive business growth require speed, agility, flexibility, talent and innovation. GICs are particularly well suited to that task.

Like any business strategy, GICs require careful planning and execution and strong internal leadership to realize the desired outcomes. Several legal, regulatory, tax, and other considerations must be addressed in setting up and operating a GIC.

Effective management of a GIC is critical. It is particularly important to integrate a GIC within the broader enterprise, immerse the GIC workforce in company culture, and view the GIC as a source of strategic innovation and not merely a vehicle for cost savings through labor arbitrage. Fortunately, many companies have already taken the path forward with GICs and succeeded, providing a blueprint for others seeking a strategy to thrive in the digital economy.