Image source: Harvard Business Review

Globalization, innovative technology, and startups are entering the big door of innovation. Existing, established companies are continously disrupted by this phenomenon and have to acquire startups for their growth in new sectors. Generations of executives have been trying to get their companies to be as innovative as the startups they either acquire or are disrupted by.

However, there's a pretty big reason they can't be. While startups are not limited by a business model or market share to defend, companies can only do what's legal. The fact that startups don't have to worry about upsetting its customers and partners gives them great advantage when it comes to innovation. They're free to try out any business model and new idea that pops up to the minds of their founders.

While in the past, companies relyed on the government and regulations to protect themselves from new market entrants, investors today realize that depending on regulations actually makes companies vulnerable. Customers that had little or no alternative before, rapidly move towards startups that can provide better services and lower prices, regardless of the legal structure.

Not only does disruption happen faster today, but it's funded at a large scale. This leaves companies to figure out how best to approach innovation and use it to their advantage.

To read more about the topic, and find out what can companies do to create a portfolio of innovation, read this Harvard Business Review article here.

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