Where does best innovation happen? Not in stand-alone labs, some companies say

livemint.com:

Some companies are moving away from the idea that stand-alone, startup-style labs are the best way to drive innovation. The re-evaluation comes as big businesses feel the pressure to harness cutting-edge generative artificial intelligence for new discoveries. The best ideas come from within the business, these companies say, rather than from colleagues in detached groups who then have to get buy-in from the company.

Walmart in January announced plans to close Store No. 8, an idea-incubation arm that had some associates based in California’s Silicon Valley. The stand-alone lab was no longer needed, the Arkansas-based retailer said, because it had developed a new method that embedded innovation deeper across the company, giving more employees the opportunity to contribute.

“We’re taking a different approach," said Anshu Bhardwaj, chief operating officer of Walmart’s technology unit. “So associates are innovating while they’re driving the business." Some tech leaders say it is a mistake to position innovation as something separate from the business itself, and that doing so can often lead to simply pursuing technology for technology’s sake. Companies risk falling into that pattern with AI, by focusing on where they can apply the technology rather than the business problems it could potentially solve, they said.

How it started A wave of innovation labs started when companies, caught flat-footed by the sudden success of digital-first companies like Amazon and Google, set up outposts in tech hubs like Silicon Valley. Some of those efforts paid off with increased e-commerce sales, entries into new markets and faster product development. Walmart said its Store No.