Innovation is the feel-good word of the year, being thrown about with wild abandon at conferences and in annual reports. Deep down, however, many business leaders are actually stressing about it. In a new global survey, one in three executives admit they're having a tough time maintaining a competitive edge in today's fast-moving economy.
That's the gist of GE's third annual “Global Innovation Barometer,” which finds many executives are suffering a condition they label as “innovation vertigo” – an uneasiness with the changing dynamics of today’s business landscape, and uncertainty over the best path forward.
There are three challenges that stand in the way of innovation and growth, the survey finds: lack of available talent, the need for business models more accommodating to innovation, and protectionist reflexes. Executives agree that greater efforts at collaboration can make a difference.
The Barometer was commissioned by GE and conducted by independent research and consulting firm StrategyOne to explore how business leaders around the world view drivers and barriers to innovation and how those perceptions influence strategy. GE expanded the study this year by surveying more than 3,000 senior business executives in 25 countries, all with direct involvement in their companies’ innovation strategy and decision making.
The countries ranking highest in perceived innovation are the U.S. (cited by 35 percent); followed by Germany (15 percent); China (12 percent); Japan (11 percent); and South Korea (5 percent).
The three greatest elements of innovation include the ability to understand customers and anticipate market evolutions (60 percent), attract and retain innovative people (43 percent), and develop new technology (42 percent).
Talent, in particular, has been consistently identified as a vexing concern. Eighty-one percent of respondents say their educational systems are not doing enough to foster innovation in their curricula. Concerns around workforce preparedness (i.e., education) and access to talent (i.e., cross-border mobility, retention, poaching) abound. About 55 percent of respondents – a six-point drop from the previous year - agree that universities and schools are doing their jobs in this regard. Fifty percent think the educational system needs a stronger entrepreneurial culture, and this is attainable through stronger linkages between students and business.
Forty-one percent believe restrictions on access to foreign talent are increasing, having a negative impact on business’ ability to innovate.
A majority of business leaders, 52 percent, also say their current business models may not be holding them back as well.
A segment, 30 percent, believe that the increased competition and accelerated pace of technological advancement is having a negative impact on local economies. Many more executives say their governments need to do more to promote and protect business development within their borders -- 71 percent say their governments should promote domestic innovation. However, these feeling are mixed -- 71 percent also reported that their governments should actually open markets further and promote imported innovation and investment (In total, 53 percent wanted both increased protection and more open borders at the same time.)
Along with encouraging more domestic innovation, executives want their governments to do a better job of safeguarding business interests such as intellectual property, and removing policy barriers such as bureaucracy and overregulation.
In addition, business leaders are very keen on the idea of greater collaboration to move innovation forward -- even with competitors, but with caveats. Sixty-eight percent, in fact, report they have actually developed a new product, improved a product or created a new business model through collaboration with another company.
Top reasons for collaborating with other companies include access to new technologies (79 percent) and markets (79 percent); while on average, 64 percent pointed to lack of confidentiality or IP protection as a deterrent, followed by trust (47 percent) and fear of talent poaching (45 percent).
(Photo: U.S. National Science Foundation.)