Wanted: Actions to Support Innovation

May 16, 2016

“Don’t like data? You won’t like the future. Many new jobs will require being equally adept at hardware and software.“
—Beth Comstock, Vice Chair, GE

 

Innovate or sink. In short, that’s the key takeaway from more than 3,200 business executives from 26 countries who took part in GE’s latest Global Innovation Barometer. Yet as we enter a new age of business disruption driven by unprecedented numbers of startups and game-changing technologies, the path to success remains challenging.

 

Embracing Innovation

Back in 2011, the Barometer’s first year, executives agreed that innovation was necessary, but nine out of 10 were shy about moving ahead in a sinking economy. In 2013, many experienced “innovation vertigo”: anxious over global economic instability, they were unsure how to move forward with disruptive ideas, products and services. A significant majority now say they want to embrace innovation that disrupts markets—even if that deals a blow to their own established business models. They are using data and analytics to better understand customer and market dynamics. And they are searching for the new kinds of talent, technology and partners that they need to gain a competitive advantage and become “disruption ready.” Two-thirds of executives surveyed believe businesses have to encourage creative behaviors and must disrupt their internal processes in order to do so. They are taking action, embracing the need to transform and adapt to an unprecedented—and at times undefined—reality. Though many confess they have yet to find the perfect business model, executives concur that efficient and successful innovation hinges on three factors: understanding customers and anticipating market evolutions (84 percent); attracting and retaining the most talented and skilled employees (79 percent); and quickly adopting emerging technologies (67 percent).

 

Disruptive Forces

Several forces are shaping how executives approach innovation, creating opportunities for internal and external disruption. These forces include collaboration, big data and the Industrial Internet. Collaboration is now mainstream. The risk associated with the lack of IP protection was a prime concern in 2013, leaving just 38 percent wanting to increase collaborative efforts; 77 percent now believe that risk is worth taking. At the same time, two-thirds of those who collaborate have seen associated revenue grow as a result. Meanwhile, big data has evolved from a buzzword to an important tool in the innovation process, albeit one that poses certain difficulties. While 70 percent of businesses see big data as critical to optimize business efficiency, 61 percent believe it will be a real challenge to implement. For those who utilize it, 69 percent see added value for the innovation process. The Industrial Internet is an emerging concept but also positively received, with half agreeing that it will drive innovation success in the future. But only one in four feels prepared to use it.

 

The Future Workforce

These forces are also shaping the future workforce. Talent is a bigger priority; 79 percent of global executives say it is a crucial asset for successful innovation—six points higher than in 2013. However, only a third believe their company excels at acquiring and retaining the right talent. To aid here, executives clearly expect their governments and policymakers to better align students’ curricula with the needs of business. This is viewed as a critical priority for 85 percent of respondents. These types of workers—those who can marry the physical and digital worlds, and who can extract and translate analytic insights into actions—will come at a premium to businesses wanting to drive change.

 

Conclusion

Innovation executives are enthusiastically taking action to harness and capitalize on the disruption occurring throughout the global marketplace. Once overwhelmed by options, executives are now showing clear determination to gain control—actively seeking the talent and technology necessary to make innovation more than an idea.

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