Skip to content

Consortia for digital innovation: building new business models

Related people
Samengo-Turner William
William Samengo-Turner

Partner

London

View profile →

Harrop Tim
Tim Harrop

Counsel

London

View profile →

Parker Nigel
Nigel Parker

Partner

London

View profile →

Mansfield Philip
Philip Mansfield

Partner Co-Head Antitrust

London

View profile →

14 December 2020

In today’s digital economy, rather than doing it alone, many organisations are finding that collaboration is a faster route to driving innovation or building new business models.

Alongside the more common arrangements for M&A, minority investing or strategic alliances, we are increasingly seeing a rise of consortia as a preferred route to bring together parties with a shared vision for redesigning an industry or a process or pushing the boundaries on a new application of technology.

Such consortia often include a number of industry peers, more naturally used to competing in their market. They may also include vertically integrated players, for example from along an industry supply chain. Some consortia will also include research organisations, technical specialists or governmental bodies who also share the common goal of building something new.

There are a number of reasons why consortia are particularly well suited to delivering innovation.

For a start, they offer the chance to pool resources to advance research and potentially develop a commercial offering beyond that which any of the members might be able to foster on their own. This offers more than just cost savings. It may also deliver better access to knowledge, best practice, connections and skills, and also the opportunity to share risk (perhaps even to enable more speculative research efforts).

Consortia by their very nature can be very helpful in building critical mass and momentum for adoption of a new approach, product or technology and can also help to jumpstart industry standardisation. A body of support for a new idea or product can also be a useful factor in early discussions with regulators and help ease the path to regulatory approval.

However, collaboration with others in the market needs to be carefully thought through and comprehensive planning at an early stage is a critical factor to success.

In this article, we step though some of the key areas to consider when planning for the use of consortia for digital transformation projects, focusing on how to add value while mitigating possible risks. We discuss:

  • The importance of setting scope and purpose from the outset
  • Choice of corporate model
  • Contribution / funding for the consortium
  • Membership and governance
  • Exit and new participants
  • Antitrust and merger control
  • Intellectual property
  • Data
  • Taxation
  • Regulatory changes