GE Report:
Innovation on the Rise, Executives Conflicted About Best Approaches

Business model innovation and collaborative innovation are expected to play larger roles in global performance, particularly in emerging markets, according to the annual "Global Innovation Barometer," published by GE this week.

By Bart King | Published 11 years ago | About a 3 minute read

One in three business executives surveyed for the report expressed concerns over their ability to maintain a competitive edge in a faster-paced, more globalized and resource-constrained environment. This emerging "Innovation Vertigo," as the report calls it, is challenging leaders to think differently about how they will achieve growth and embrace complexity.

"Innovators must be resilient or risk being left behind," said Beth Comstock, senior vice president and chief marketing officer of GE. "Change has become constant and we see leaders responding by betting big on more unconventional approaches to innovation to unlock growth."

While incremental and product innovation have historically been the main drivers of growth for companies, business model innovation is gaining momentum as a route to success, the report states. Innovating a new model may offer businesses a less risky and resource-intense path to better understand and reach customers over traditional methods such as new product development.

Fifty-two percent of respondents believe the development of new business models will contribute the most to their company's performance going forward, representing a six-point increase when compared to how it has traditionally contributed to their innovation portfolio.

According to the survey, collaboration between businesses is emerging as a means to surpass competitors and generate revenue, particularly in emerging markets. Yet despite global acknowledgement of the power of partnerships, lack of effective IP protection, trust and talent poaching pose barriers to action.

Eighty-seven percent are confident that their firm could be more successful at innovating through partnership and collaboration and 68 percent of respondents report already having developed or improved a product in partnership with others. Germany, China, Brazil and Sweden are most experienced at partnership.

Top reasons for collaborating with other companies include access to new technologies (79 percent) and markets (79 percent); while on average, 64 percent pointed to lack of confidentiality or IP protection as a deterrent, followed by trust (47 percent) and fear of talent poaching (45 percent).

Other interesting highlights from the survey include:

When asked about the main priorities their governments should focus on to support innovation, education (50 percent), fighting bureaucracy (48 percent) and protecting trade secrets (41 percent) were identified as the most pressing — in particular by Mexico and Brazil.
Forty-one percent believe restrictions on access to foreign talent are increasing, having a negative impact on business' ability to innovate.
Many executives appear torn about how to best respond to the changing business environment. In an effort to mitigate this perceived risk to their business and local economies, many are responding by adopting protectionist tendencies; 71 percent of executives reported that their government should prioritize promotion of domestic innovation rather than imported, while 71 percent also reported that their governments should actually open markets further and promote imported innovation and investment. Paradoxically, there was a 53 percent overlap between these two opposing views.

The Barometer was commissioned by GE and conducted by research firm StrategyOne to explore how business leaders around the world view drivers and barriers to innovation and how those perceptions influence strategy. The survey expanded to more than 3,000 senior business executives in 25 countries this year, all with direct involvement in their companies' innovation strategy and decision-making.

In December, the Network for Business Sustainability (NBS), a research group based at the Ivey Business School, published a report called Innovating for Sustainability that describes 39 practices used to foster innovation.

@Bart_King is a freelance writer and communications consultant.

Bart King

Bart King is the founder and principal at New Growth Communications. He specializes in helping sustainability leaders develop thought leadership content and strategy

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