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Innovation is a top priority for companies seeking to grow in the wake of the economic downturn, but flaws in managing innovation may hinder their progress. New Accenture research indicates that many companies in the US and UK have, in fact, increased innovation funding during the downturn, demonstrating innovation’ s perceived value as a driver of business growth. However, poor returns on investment will likely continue until companies systematically manage innovation with the same rigor and discipline as other critical business processes.
To further understand how companies are addressing innovation in this economic climate, Accenture conducted an online survey of more than 630 executives in May, 2009 in the United States and United Kingdom. Respondents represented a broad cross-section of industries ‘“ including automotive, banking, capital markets, consumer goods and services, electronics and high tech, insurance, manufacturing, pharmaceutical and medical products, and retail.
Key Findings
According to this Accenture research, almost half of respondents said they increased funding for innovation in the preceding six months, while one-third said there was no change in funding for innovation. Additionally, nearly nine out of 10 these respondents said that innovation is as important, if not more important, than cost reductions to their company’ s ability to achieve future growth.
However, the Accenture study found flaws in corporate management of innovation, including process shortcomings and a lack of business discipline that result in internal barriers to success. Additionally, there is widespread risk-aversion and a failure to learn from past mistakes. Past innovation failures are most commonly attributed to incorrect pricing, failure to meet customer needs, and being late to market, which can be mitigated by approaching innovation with the appropriate structure and rigor.
Sources
- Innovation: a Priority for Growth in the Aftermath of the Downturn [PDF, 242KB]
- Innovation Research Summary [PDF, 846KB]