These engagements come in many varieties. Some in-house centers are setting up incubators or acquiring startups while others collaborate with startups on hackathons or open innovation initiatives. In certain instances, captive centers are working with startups as part of their relationship with an external IT service provider.
The benefits include faster speed to market, decreased cost of innovation, and brand enhancement that helps with captive center talent recruiting, according to Dani. Captive centers working with startups may also be laying a foundation for broader startup engagements with the parent company and facilitating internal cultural acceptance of increased agility and responsiveness, he says.
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