You Want to Set Up an Innovation Space: So What?

Organizations are increasingly turning to the design of physical spaces to support their innovation efforts. From the pioneering examples of Xerox PARC to the Nike Kitchen, and IKEA Space 10, many companies are experimenting with different space formats as part of their innovation strategy. Despite the growing popularity of innovation spaces, there are challenges. What type of innovation space should you set up? How do you measure the success of your innovation space? How much should you invest?

In our new series, we explore frequently asked questions about innovation spaces. In this post, we start with the question “Why”.

Why setting up an innovation space?

Not all innovation spaces are the same. Deciding on the purpose of your innovation space early on is paramount. We distinguish the purpose of innovation spaces into four categories: exploration, development, rejuvenation, and impact. The four purposes can be combined. However, it is important to spell out which ones are driving your strategy and to develop consistent performance measures.


One reason to set up an innovation space is to explore new technologies, applications, and industry trends. Innovation spaces that are motivated by exploration are often open to external actors. Notable examples include the Autodesk technology centers that welcome scientists, technologists, and artists through their residency program. Autodesk supports a community of innovators to create a shared vision of the future of making. To evaluate the success of exploration driven innovation spaces, we advise applying knowledge-based measure of success. These can include the number of patents generated, entries created in a shared knowledge base, and sharing sessions organized within the company. To make exploration driven innovation spaces successful it is important to document the learnings and make them accessible outside the boundaries of the innovation space.


Following the growing trends of collaborative innovation, many companies set up innovation spaces with the objective to collaborate with customers, startups, and innovators. In this case, collaboration is aimed at the development of new products, services, and business models. For instance, Google’s Area 120 is targeted to employees who want to develop startups that fit into Google’s portfolio. The managers of Area 120 evaluate promising ideas and incubate them in their startup program until ready for the go-to market. The performance measures of development driven spaces should be directly or indirectly linked to profitability. For instance, managers can consider the return on investment of the new products and services developed, benefits from market expansion through partnership, and savings from process optimization.


Established companies may use innovation spaces to rejuvenate the company culture. Cultural rejuvenation includes training employees in lean and agile ways of working and their engagement with a creative work environment. Innovation spaces motivated by this purpose often recall typical startup environments and they are open to different employees on a rotating basis. The Garage by Microsoft is a case in point. The Garage welcomes employees throughout the company in an inspiring environment that pays tribute to the hacking culture by promoting technological experimentation and engagement with young engineering talent. People-based measures are the most suitable to evaluate the success of spaces driven by cultural rejuvenation. For example, managers can measure whether employees’ engagement with the innovation space translates into a change in ways of working and processes in the main company. Likewise, the number of employee-led initiatives may become an indicator of a more bottom-up approach to innovation.


Finally, innovation spaces may be a springboard for enhancing corporate environmental and societal goals. As a title of example, Kering created the Material Innovation Lab (MIL) to identify new products and solutions for sustainable fashion. MIL has developed a library of sustainable fabrics that is freely accessible to visitors from within and outside the company. When the impact is the driver, impact based measures have to be applied. The type of impact measures adopted depends on the projects pursued in the innovation space. Some spaces emphasize the environmental impact, whereas other societal impact. The United Nations’ SDGs (Sustainable Development Goals) offer a blueprint to design your impact based strategy.

To learn more about the design of innovation spaces follow the next blogposts!

InnoInsights aims to be a source of inspiration and guidance for how organizations can collaborate with external innovators.