NEW YORK--(BUSINESS WIRE)--GE (NYSE:GE) today unveiled the results of the 2014 “Global Innovation Barometer,” which examines the transformative actions that senior business executives are taking to pursue innovation and indicates a majority of leaders embracing a “disruption-ready” strategy of new trends, policies, and processes.
The study – now in its fourth year and reaching 3,200 senior business executives in 26 countries – saw a shift from the 2013 Barometer, which revealed high levels of anxiety among executives. This “innovation vertigo” last year had led to uncertainty at how to move forward. Leaders today confess they remain far from the perfect model but many are demonstrating momentum, identifying disruption drivers to prepare for and adapt to unexpected market changes.
While 60 percent express that their struggle to define effective business models is killing their ability to innovate, executives are shifting internal priorities and processes to change that—encouraging creative behaviors, partnering with other businesses to advance competitive advantage, and using data and analytics to better understand customer and market dynamics. Emerging markets are most open to disrupting their business models.
Beth Comstock, senior vice president and chief marketing officer of GE said, “Change is everywhere and this year’s Barometer shows how more than ever leaders are embracing the new models and technologies critical to innovating today and making their businesses ‘disruption ready.’ Innovation at GE is about developing new markets and technologies to drive growth. We are partnering and learning from startups and entrepreneurs, finding ways to be a faster and simpler company, and using big data to unlock more value for our customers and advance new ideas. “
In spite of this momentum, executives continue to report several challenges to effectively innovate, including access to and ability to retain talent, internal inertia, unsupportive policy frameworks, and protectiveness over core revenue streams.
Collaboration a Worthy Investment
Seventy-seven percent of executives view collaboration as a risk worth taking—a notable shift from last year, where just 38 percent of leaders, citing concerns about intellectual property theft and talent poaching, wanted to increase collaborative efforts. Eighty-five percent saw startups and entrepreneurs as the most promising partners to drive innovation success. Many (64 percent) report an increase in revenue and profit generated over the past year as a direct result of partnerships.
- Turkey (+16 percent), Canada (+12 percent), Japan (+11 percent) and Israel (+10 percent) saw the highest increases in revenue generated by collaborative innovation activities over the last year.
Big Impact of Big Data
Seventy percent of executives believe that big data is critical to maximize efficiencies in running their businesses, and analytics and data science are fields of rapidly growing interest. Understanding customers and anticipating market evolutions is a top innovation priority (84 percent), yet many do not yet recognize the predictive value that big data can provide. One factor holding them back is the perceived challenge of implementation: 61 percent are concerned it will take resources away from traditional innovation activities. When businesses do use big data, 69 percent are seeing a return on investment.
- Seventy-two percent of early “big data” adopters agree that data scientists have strong influence and authority in their company.
- Only one in four executives feel prepared for big data. Of those that have not yet embraced it, 29 percent report planning to implement a strategy for it while nearly an equal amount (24 percent) report no plans to do so.
- Turkey (90%), Algeria (90%), Mexico (85%), South Korea (84%), China (83%) and Brazil (83%) are the most enthusiastic about the potential for “big data” to advance their business.
“At GE, we aim to use data to understand customers and market evolutions so we can pivot to find new areas to innovate,” Comstock said. “New kinds of jobs are driven by these new needs, and we’re pushing to foster future talent who will help us drive global innovation.”
Competing for the Future Workforce
Talent continues to be top of mind for innovation executives. Seventy-nine percent of global respondents believe talent is a crucial asset for successful innovation—a six-point increase from 2013—but only 32 percent believe that their organization excels at attracting and retaining it. New skills are rising in priority and 85 percent of executives want governments to better align student curricula with the future needs of business.
- Fifty-seven percent of executives feel limited by a lack of talent / inadequate skillset, which is particularly pressing in emerging markets: Indonesia (77 percent), India (73 percent), Malaysia (71 percent), Algeria (73 percent), and Kenya (62 percent)
External Policy Frameworks for Innovation
Business leaders recognize that governments play an important role in developing environments conducive to innovation, yet many identify hurdles to taking advantage of existing opportunities like public funding or incentives for innovation. Businesses expect governments to implement robust IP protections and ensure public procurement and incentives always favor the most innovative solutions, even if they come from companies based outside their own country (70 percent). This nation-agnostic view and interest in innovation from foreign-based companies is particularly strong in emerging markets.
- Eighty-seven percent believe the protection of intellectual property should be a leading government priority.
- Brazil, Israel, Germany, South Korea and India indicated a drop in government support of innovation since last year—with the biggest drop (16 points) occurring in India.
- Eighty-seven percent say bureaucracy and red tape blocking public funds for innovation is hindering success.
About the GE Global Innovation Barometer:
The research was commissioned by GE and conducted by Edelman Berland between April 2, 2014 and May 30, 2014. Interviews with the 3,200 senior business executives were conducted by telephone across 26 countries. All respondents are VP level or above and directly involved in their company’s innovation processes. Twenty-eight percent of those surveyed are at the C-suite level. The countries included in the research are: Algeria, Australia, Brazil, Canada, China, Germany, India, Indonesia, Israel, Italy, Japan, Kenya, Malaysia, Mexico, Nigeria, Poland, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Sweden, Turkey, UAE, UK and USA.
GE (NYSE: GE) works on things that matter. The best people and the best technologies taking on the toughest challenges. Finding solutions in energy, health and home, transportation and finance. Building, powering, moving and curing the world. Not just imagining. Doing. GE works. For more information, visit the company's website at www.ge.com.
About Edelman Berland:
Edelman Berland is a global, full-service market insights and analytics firm that provides corporate, non-profit and government clients with strategic intelligence to make their communications and engagements with stakeholders the smartest they can be. The firm specializes in measurement, tracking and analysis in reputation, branding and communications. Edelman Berland is part of Edelman, the world’s largest public relations company. Edelman Berland has more than 100 employees in offices around the world. Edelman Berland: Intelligent Engagement.