Fairfield, Conn., January 18, 2012 – GE (NYSE: GE) today released the results of its second annual “Global Innovation Barometer” that confirm business executives’ belief in innovation as the main driver of prosperity, competitiveness and job creation, and also reveal how challenging and uncertain economic and political environments may hinder companies’ ability to deliver meaningful innovation.
The continued uncertainty of the global economy has had a marked impact on companies’ ability to innovate, with nine out of 10 executives reporting increased difficulty accessing external funding or a conservative shift in appetite for risk. Specifically, 88 percent of respondents saw increased challenges accessing venture capital, private investment and government funding, while 77 percent reported a reduction or reevaluation of the company’s willingness to take risks.
“This year’s study confirms a lot of what we’ve been seeing in the global marketplace, that the uncertainties inherent in today’s economic environment are challenging business’ ability to innovate,” said Beth Comstock, senior vice president and chief marketing officer of GE. “We see these results, in some ways, as a rallying cry for business leaders to understand where and how their innovation strategies are being challenged and to drive towards solutions. Innovation is a powerful lever to address the challenges of a growing world. It allows us to use resources more efficiently, produce more with less and deliver better technologies to help markets drive economic growth and better quality of life.”
GE expanded its global study this year by surveying nearly 3,000 senior business executives in 22 countries, all with direct involvement in their companies’ innovation strategy and decision making. The Barometer was commissioned by GE and conducted by independent research and consulting firm StrategyOne to identify drivers and deterrents of innovation, and to analyze perceptions around innovation opportunities and challenges.
Innovation and Growth Inextricably Linked
Executives surveyed indicate that innovation and competitiveness are more connected than ever before. By comparing survey results to external economic data, the report also indicates that countries where innovation policies are perceived as more competitive actually delivered more growth than those countries whose policy frameworks are perceived by executives as less competitive.
The survey showed that companies’ internal investments in innovation, from research and development budgets to the pursuit of new products or business models, are particularly at risk when the business community perceives a negative shift or deterioration of government policies that support innovation.
“Investing in innovation is a critical piece of global competitiveness and it comes in many forms – from traditional R&D to new products, markets and business models,” said Comstock. “Cutbacks today will have reverberations on economic and social progress for years to come, and may seriously hinder a company’s ability to compete. Governments and businesses both need to do their part to shore up the fragile innovation ecosystem.”
Companies Embrace New Approach to Innovation
The 2012 study validates the findings of the inaugural Barometer report – that companies are moving beyond the traditional, closed model of innovation and embracing a new paradigm, one that engenders collaboration between several partners, values the creative power of smaller organizations and individuals, and tailors solutions to meet local needs. Business leaders around the world agree that great innovations in the 21st century will be about shared value -- addressing both human needs and the bottom line -- versus delivering profit alone.
However, a disconnect surfaced between the importance of partnerships and the need to pursue them in the near term. A “partnership paradox” presented itself in which 86 percent of global executives believe that
partnerships are an important component of the new model of innovation, but only 21 percent believe finding partners is an immediate priority to innovate more on a day-to-day basis.
No One-Size-Fits-All Approach
Above all, the Barometer clearly demonstrates that while innovation at the global level continues to move towards an open, more collaborative model, innovation at the local level presents a complex landscape of challenges and opportunities that cannot be addressed in broad strokes, but that must be understood and dealt with at the market level. Not only do the environments change dramatically from country to country, but so do the perceptions of where innovation can be most effective, and who is most likely to drive it.
“Creating conditions for meaningful innovation requires the right blend of internal and external factors that can readily be adapted to meet individual market and customer needs,” Comstock said. “Fortunately, this year’s study suggests that companies interested in competing are up for the challenge, ready to adopt and deploy a modern approach to innovation that will deliver both value and meaningful solutions.”
For more information on this study and a detailed report on results, visit: www.GE.com/innovationbarometer.