Of the top 10 companies in BCG's sample, 57% make CVC investments; 66% use incubators and accelerators (accelerator partnerships account for 27 percentage points); and 41% operate innovation labs.

A little over three years ago, management consultants Boston Consulting Group (BCG) used Global Corporate Venturing data in its first report* on corporate venture capital (CVC) investing and so concluded: “CVC appears to be here to stay.”

Now, in its latest report, Corporate Venturing Shifts Gears, BCG admits “although time has validated that insight, we did not foresee how quickly and deeply CVC investing would take root and evolve”.

Global Corporate Venturing identified a record number of deals and value of aggregate rounds last year. Keynote speakers at this year’s GCV Symposium in London on 24-25 May, include Jeffrey Li, managing partner at Tencent, Nagraj Kashyap and George Ugras, new heads of Microsoft Ventures and IBM Ventures respectively, Sue Siegel, CEO of GE Ventures, and Ralf Schnell, head of Siemens Venture Capital.

The larger the company, the more intensive its use of venturing tools. Of the top 10 companies in BCG’s sample, 57% make CVC investments; 66% use incubators and accelerators (accelerator partnerships account for 27 percentage points); and 41% operate innovation labs.

The percentage of top 30 players employing CVC rose from 27% in 2010 to 40% in 2015, BCG added. During the same period, the percentage of companies using accelerators and incubators surged from 2% to 44%. The usage rate of innovation labs climbed from 5% to 19% among companies.

When Global Corporate Venturing in January published its World of Corporate Venturing annual review of the industry for last year, this trend for smaller companies within the Fortune 500 largest US-listed businesses to use fewer such innovation tools had been identified.

But where the dealmaking is happening by those do invest is becoming clearer. The value of CVC investments in software by the top 30 companies now surpasses the value of their investments in all other target industries combined, BCG found. The value of investments in software startups has risen 24 percentage points, from 28% between 2010 and 2012 to 52% between 2013 and 2015.

When BCG assessed the focus of innovation, the tools, and the search fields for the companies in our sample, it identified various industry patterns:

  • Automotive companies seek innovation in adjacencies, such as connected cars and big-data analytics, by using accelerators and incubators. 
  • Chemical companies focus on core-business innovation using mainly CVC, with their largest investments fostering innovation in areas such as base chemicals, polymers, and specialty chemicals. 
  • Consumer goods companies look for core-business innovation, seeking advances in areas such as new products, marketing concepts, and new retail formats. Further, they seek innovation in adjacencies, such as big-data analytics. Consumer goods companies mostly employ accelerators or incubators, or a combination of them, and innovation labs. 
  • Financial services institutions focus on adjacencies in areas such as mobile payment systems, big-data analytics, and IT security using accelerators and incubators. They also use accelerators and incubators to develop long-term customers: start-ups that receive short-term support and resources that enable them to grow and succeed are likely to be loyal to the institutions that provided assistance. 
  • Media and publishing companies mainly use CVC, or a mix of CVC and accelerators or incubators, to find core-business innovations, such as big-data analytics, advertising technology, and multiplatform distribution. In addition, these companies use CVC to gain an early understanding of disruptive business models, which are managed in parallel to the core business. 
  • Technology companies focus on core-business innovation using CVC or a combination of CVC and accelerators or incubators. Technology companies use these tools to locate innovations in such fields as the internet of things, big-data analytics, cloud solutions, and IT security. These companies are increasingly turning to innovation labs, using them in concert with their other venturing tools. 
  • Telecommunications companies seek innovation in their core businesses and adjacencies, mostly using a combination of CVC and accelerators or incubators. For core innovation, the search fields include connectivity, infrastructure and networks, and mobile solutions; for adjacent innovation, the search fields include e-commerce, platforms and services for the Internet of Things, financial technology, and mobile payment systems.

* Corporate Venture Capital: Avoid the Risk, Miss the Rewards, BCG Focus, October 2012.