European Innovation Outposts in Silicon Valley

European Innovation Outposts in Silicon Valley

28 April 2017

As companies realize that the catchphrase “innovate or die” is more of a directive than a cheeky slogan, innovation outposts pop up all over the world. An increasing number of European enterprises have opened innovation outposts around the world with goals of boosting innovation, reporting trends, scouting investment, and facilitating rapid MVP prototyping. The logic is apparent: if your company is present where innovation takes place, you may be able to recognize the trends and adapt them to your firm’s business goals and processes - giving you a competitive advantage over companies who don’t leave their headquarters.

Since the internet boom, clusters of top talent and innovation have popped up in a few particular areas around the world: Silicon Valley, Boston, Tel Aviv, Hong Kong, Tokyo, Singapore, and London.

This article focuses on the 44 European enterprises with innovation outposts in Silicon Valley.

Who’s who in Silicon Valley?

Germany and France lead the pack of innovation clusters in Silicon Valley. Out of the 44 European corporations in Silicon Valley, 34% are German, while France follows close by with 30%. German companies in Silicon Valley include Arvato, Audi, Axel Springer, BASF, Bayer, BMW, Bosch, Deutsche Bank, Deutsche Telekom, Hella Ventures, Innogy, Mercedes Benz, Munich RE, SAP, and Volkswagen.

As Silicon Valley has one of the highest rent prices in the world, many companies to opt for a lean presence with only a handful of workers to support their discovery efforts. Close to half of the European companies with innovation outposts in Silicon Valley have opted for innovation antennas, 1-3 person teams within in a coworking space.

The remaining 54% have Corporate Innovation Labs; larger presences made up of 10-25 people. Very few offices have full-blown R&D centers that house an extensive 50-100 people supported by dedicated vertical research teams.

Why are companies laying off troves of native workers?

Advancement in automation has made some jobs obsolete. For example, 8-hour call-center jobs have been replaced by around-the-clock Artificial Intelligence chatbots; machines are set to fully replace cashiers, retail salespeople notice the hours slip from their schedule as more consumers opt to shop online, and lastly, convenient banking apps are replacing bank tellers.

Companies that desire to remain competitive must develop with the times - lean, optimized workforces spread around the world. Hanging on to obsolete positions is directly detrimental to the overall health of a business. For this reason, many leaders find a strong business case in shutting down redundant operational teams at company’s headquarters and in turn opening a lean innovation lab abroad.

Why Silicon Valley?

At this point, most revolutionary innovations come directly from America. The ambitious, visionary, risk-friendly, forward-thinking startup scene is simply legendary. Investors in Germany have the reputation of being less visionary, more critical, and exceedingly risk-averse. Germany’s portfolio of successful startups confirms this reputation, as they are mainly copycats of American startups. German Chancellor Angela Merkel also lamented that Germany is "lagging behind" other countries when it comes to innovation. "This is a very serious challenge, and we have no time to lose because we know that other parts of the world are developing very, very quickly," she said.

On the other hand, these 44 European startups with Innovation Outposts in Silicon Valley are taking the horse by the reigns and choosing to grasp inspiration directly from the source and embracing radical modernization over caution and tradition.

Let's face it: traditional jobs are quickly disappearing. As companies lay off obsolete departments and hire very few people to replace them, don’t fret. It's just the cycle of business. If you have been put out of work, look for a career with the many groundbreaking startups that corporates are drawing their inspiration from.