The world’s most innovative companies expect to grow by more than 60%, enjoying $318 billion revenue boost over the next five years, a PricewaterhouseCoopers (PWCH) study has found.
A Report accompanying the Study was released at a meeting of the World Economic Forum held in Dalian, China on September 11, 2013.
More than 1700 business leaders representing 30 sectors in 25 countries participated in the Survey, stated to be the largest of its kind.
Startling discovery
It found a direct link between innovation and growth and quoted top 20% of innovators as saying that their growth rate over the next five years will be double the global average and three times higher than the least innovative companies.
PWHC New Zealand Chief Executive Officer Bruce Hassall said that the findings were startling and clear.
“If you are not innovating, you are not growing. For the first time, we can quantify and benchmark the business benefits of innovation. It is exciting, and confirms the findings of the recent World Economic Forum Global Competitive Index. According to the Index, although we are doing well as a good place to do business, we must buck up our investment in innovation,” he said.
Competitive edge
Mr Hassall said that innovation is a competitive necessity and should be treated like any other business process,
“It should be aligned to organisational objectives to deliver serious returns. This is a wake-up call to New Zealanders that ‘Number Eight Wire’ thinking should have a large structure around it and not left to chance,” he said.
The Study said that successful innovation is dependent on well-developed strategies and that about 80% of top innovators have well-defined innovation strategies, compared with less than half among the least innovative.
“Innovation is delivering transformational change. It is for all businesses in all countries, and unlike five years ago, it is overtaking globalisation as having the greater impact on growth. Companies are also innovating the way they innovate,” Mr Hassall said.
Diverse concept
According to him, innovation has moved beyond products, services and the domain of technology and digital companies.
It is also relevant to the way businesses think about their business models, operating systems and customer experience.
The top tier of innovators identified in the Study represented diverse sectors, ranging from healthcare and automotive to financial services. The companies stretched from India to the Netherlands and Brazil.
“China is an example of attitude change. Its businesses are moving from a strategy of fast-follower imitation to pure innovation. China is now behind only the US in terms of its R&D spending. The Chinese are outspending everyone and New Zealand should take notice,” Mr Hassall said.
Bucking commonly held beliefs, just one in five of the most innovative companies described its approach to innovation as ‘informal,’ compared with about one-third of least innovative companies.
Fighting chances
Mr Hassall cautioned against odds.
“Innovation is not always smooth-sailing. It can be disruptive and involve a business cannibalising its own products or services for the long-term good. Business leaders should remember that there is no single roadmap for innovation, yet by making it a key focus and following a few simple steps, it can improve its chances. Innovation is our key to jumping further ahead of Australia,” he said.
Photo :
Bruce Hassall
