Top innovators globally expect US$250 billion boost in revenue over the next five years as a result of innovative approaches.
Over half of Irish business leaders plan to increase investment in innovation.
PwC study finds innovation moving from fringe activity to mainstream.
The world's most innovative companies expect to grow by more than 60% over the next five years, adding a total of more than US$250 billion in new revenues as a result of sophisticated approaches to innovation in all areas of their operations.
A new PwC study, Breakthrough Innovation and Growth-your $500 million opportunity, released here at a meeting of the World Economic Forum, found a direct correlation between excellence in innovation and superior revenue growth. According to the study, the top 20% of innovators worldwide say their growth rate over the next five years will be double the global average and three times higher than that of the least innovative companies.
Companies are fundamentally changing the way they innovate, the study found. Innovation has moved beyond products and services and now regularly encompasses business models, operating systems and customer experience. Additionally, collaboration with both internal and external partners has become vital to innovation efforts.
Ann O’Connell, Consulting Partner, PwC Ireland said:
“Innovation has gone mainstream globally and in Ireland. Five years ago, expansion into China was seen as the most powerful source of growth for just about every business. Now, companies see that innovation presents them with greatest potential for growth. In Ireland, business leaders are also prioritising innovation part and parcel of their return to growth. For example, over half of Irish business leaders plan to increase investment in innovation in the year ahead.”
While innovation was once thought to be the province of technology and consumer goods companies in developed economies, it has now become a key driver of growth for companies regardless of sector or geography. The top tier of innovators identified in the study come from a diverse range of sectors from healthcare to automotive to financial services, and from India, to the Netherlands and Brazil.
Ann O’Connell added:
“Business leaders must understand that there are already innovation pioneers in their industry and around the world. Leaders must be ready to step up to disruptive challenges from their more innovative competitors.”
The study found that successful innovation is dependent on well-developed strategies. Nearly 80% of top innovators said they had well defined innovation strategies, compared with less than half of among the least innovative companies.
The most innovative companies treat innovation in the same way as any other business or management process, the study found. Just one in five of the most innovative companies described their approach to innovation as ‘informal,’ compared with about one-third of the least innovative. Executives from the most successful companies say they devote more time to innovation, have more incentives to collaborate and are more likely to be supported by senior management.
The study found major differences between the most and least innovative companies. Among them:
The most innovative companies are less likely to manage innovation efforts informally: 21% vs. 32%.
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