Who Is Really Driving Innovation?

Startups are often cast as the disruptors of modern capitalism, agile outsiders that overturn complacent incumbents and force entire industries to evolve. It is a narrative repeated so often, in boardrooms, business schools and government policy alike, that it has become conventional wisdom: the future belongs to whoever moves fastest.

Research by Dr Robyn Klingler-Vidra, Vice Dean for Global Engagement at King's Business School, challenges that picture. Her work suggests that in many of the world's leading innovation economies, startups' value is not in replacing established companies at all. Instead, startups succeed by helping industry leaders adapt, by supplying ideas, technologies and talent that large firms increasingly struggle to generate from within. In return, startups benefit from the feedback, validation and scale they get through working with big firms.

Rethinking the disruption narrative

In her book, Startup Capitalism, co-authored with Professor Ramón Pacheco Pardo, Klingler-Vidra examines the lessons we can learn about innovation across the globe. She explores how governments across East Asia have supported startups over the past several decades. The expectation, shared by most policymakers and commentators, was that this support would help startups challenge entrenched corporate giants such as Samsung, Toyota and Tencent.

That is not what the evidence shows. The 'secret' to Japan and South Korea's approach, as detailed in Foreign Affairs, is that startup policy has helped reinforce the global competitiveness of the countries' largest companies. Startups have become a source of new ideas and specialist expertise that established firms draw on to remain competitive.

"It's not about startups replacing big business," Klingler-Vidra says. "It's about startups injecting innovative DNA so big businesses can maintain their edge in global markets."

A division of labour, not a contest

At the heart of the research is a simple observation: startups and large corporations excel at different things. Established firms have the capital, infrastructure and global reach to bring products to market at scale, but their size can make them slower to experiment. Startups can test new technologies quickly but often lack the resources to commercialise them alone.

Klingler-Vidra argues that policymakers across East Asia have effectively engineered a division of labour between the two. Through government-encouraged accelerators, corporate venture capital funds, partnerships and the movement of skilled talent, startups inject what she calls innovative DNA into established companies. In return, those companies provide the scale and market access that allow promising innovations to succeed commercially.

That argument has gained particular relevance as geopolitical tensions reshape economic policy. In a 2025 Nikkei Asia op-ed, Klingler-Vidra and Pacheco Pardo argue that Japan, South Korea and Taiwan increasingly see startups as part of their national economic security strategy, as competition between China and the United States intensifies. Increasingly, such middle powers are bringing startups and incumbent firms together to foster their 'niche superpowers' that help the governments assert sovereignty in international affairs.

Implications for leadership

Klingler-Vidra's research challenges one of the most enduring assumptions in business: that innovation comes from either agile startups or established corporations. The evidence increasingly points to systems that know how to combine the strengths of both.

For senior leaders, the implications are practical. Relying solely on in-house research and development can limit exposure to new ideas, while treating startups only as acquisition targets or competitive threats risks overlooking their value as collaborators. The more useful question is not who will drive innovation, but how organisations build the partnerships and structures that allow innovation to flow between startups and established firms.

These are the kinds of questions explored on King's Executive MBA, where Klingler-Vidra's research on startup ecosystems and industrial policy informs how participants think about economic theory, innovation and long-term competitiveness.