Global Innovation Survey Summary

Capgemini Global Innovation Survey 2010

 

Innovation is considered a top strategic priority, with a primary focus on identifying new business opportunities to take advantage of an economic upturn.

 

As the knowledge partner of the World Innovation Forum, Capgemini Consulting has recently completed its global innovation survey on the current state of innovation. The result is our second innovation leader versus laggard study. It covers five key areas that affect a company’s innovation success: the strategic outlook companies have with respect to innovation, their capabilities to manage the innovation process, the overall impact of technology, the innovation function, and how these factors influence companies’ spending plans.

The study offers a unique perspective by looking at the differences in behaviour of innovation leaders vis-à-vis laggards across these key areas. Finally, this report offers an overview of the most important implications for innovation executives – looking to improve the material impact of their innovation efforts on the business results.

 

In summary, this study reveals that given the strategic priority companies allocate to innovation and their corresponding spending plans, the maturity of their formal innovation governance structure lags behind considerably.  To overcome many of the innovation bottlenecks encountered, it is time to establish an innovation function that is able to deal with this kind of innovation governance and decision-making. Furthermore, there is an enormous unlocked potential for innovation in the involvement of external parties in the innovation process. Innovation leaders may have outpaced their peers by simply being better at involving external parties, leveraging a much broader innovation network and increasing innovation potential. Also, the study shows that more value, in terms of impact on business results, is to be expected from business model innovation, than from any other form of innovation. Targeting new business opportunities in emerging markets is much more likely to be successful when approached outside of the traditional competitive landscape. These and a wide range of other relevant findings for innovation and business executives are elaborated on in this report. The most important findings per area can be summarized as follows.

• Innovation in considered a top-three strategic priority in the recent global survey by more than seventy-six percent of the respondents at Capgemini Consulting. Moreover, making innovation a top priority pays off. This is evidenced by the correlation found between ranking innovation as the top priority and its positive impact on the business results, as illustrated by the leader versus laggard comparison.
• Most innovation efforts are put into customer-focused innovation whereas fewest resources are allocated to business model innovation. Innovation leaders put relatively more effort into business model innovation, whereas innovation laggards allocate more efforts to incremental product improvement. 
• As the global economy begins to rebound, identifying new business opportunities is the primary area of focus for 46 percent of respondents. In addition, innovation leaders are preparing themselves for hyper growth in a new business cycle whilst innovation laggards are focusing on increasing productivity of existing assets.

Key opportunity areas with respect to innovation management are the formalization of the innovation governance structure and the capability to engage external parties in the innovation process.

• Executive level commitment and the idea generation and enablement process are the overall best developed innovation management capabilities.  Most concerns exists around the innovation governance structure among respondents. 
• Most respondents – 53.5 percent – indicate they have developed relationships with third parties to support their innovation efforts on an ongoing basis.
• The large majority of 89 percent of survey respondents has made the step to somehow involve their customers in the innovation process.  
• Leaders have advanced to a high level of maturity when it comes to engaging third parties. They maintain ongoing dialogue with their customers or even integrate them into their innovation project teams. On the other hand, laggards are predominantly stuck at the ad-hoc engagement of third parties for innovation and have advanced less in terms of customer involvement.

 

 

Emerging technologies are expected to have a significant impact on companies’ value chains, however few companies feel highly capable of adapting rapidly to anticipated changes.

• Technological innovation is anticipated by the majority of respondents to have an incremental (42 percent) up to fundamental (38 percent) impact on their organizations’ value chains. 
• Fifty-six percent of respondents say their organization is somewhat capable of adapting rapidly to emerging technological innovations.
• Clearly, our innovation leader group is the best equipped for emerging technological innovations, scoring thirty percent higher in the category ‘highly capable and prepared’ than their lagging counterparts.

Establishing accountability for innovation through a corporate function or dedicated executive is part of the solution towards attaining innovation leadership.

• When looking at the innovation function within organizations the most frequently mentioned hurdles to innovation success are urgency of pressing day-to-day business demands (54 percent of respondents) and financial constraints (41 percent). 
• There seems to be a clear relationship between the appointment of an accountable innovation executive and the innovation success rate, with 59 percent of innovation leaders having such an accountable executive versus only 32 percent of the next best performers.
• The following types of innovation decisions are mentioned most as decisions to be made by the innovation executive or the corporate innovation function: determining the focus of innovation efforts – i.e. the innovation strategy (80 percent of respondents), and the allocation of funds and innovation portfolio management (67 percent).

Companies are increasing their spending on innovation across a wide variety of areas to improve their capabilities and competitiveness.

• The large majority of our survey respondents – 63.5 percent – anticipate an increase in their innovation spending over the next 12 months. 
• More than half of the respondents (56 percent) say they are planning to increase their innovation investments in rapidly developing economies. 
• When it comes to innovation investment areas our respondents are not intending to change the focus of their efforts: new product development (59 percent) and customer focused innovation (54 percent) come out on top. When making the split by success rate it appears that innovation leaders tend to invest more in customer focused and business model innovation, whereas laggards invest relatively more in incremental product improvement. 
• Nearly half of the respondents say they are likely to invest in M&A to improve their innovation capabilities, in particular to gain access to new markets.