|By ACN Newswire||
|September 17, 2013 11:28 AM EDT||
Tokyo, Sept 17, 2013 - (ACN Newswire) - A new PwC study entitled Breakthrough Innovation and Growth released last week at a meeting of the World Economic Forum "Summer Davos" in Dalian, China, 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 exceed 60% -- double the global average and three times higher than that of the least innovative companies.
Companies are becoming more sophisticated in 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.
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.
"There are lessons here for Japanese companies that sometimes struggle with innovation," said David Jansen, PwC partner and author of PwC's 2012 report Revitalizing Corporate Japan: A Prescription For Growth. "The most innovative companies are no longer dabbling with incremental innovation but are rather looking for breakthrough or radical innovations. This typically requires collaborating with external partners."
"Innovation is a competitive necessity for companies today," Jansen continued. "Failure to innovate could result in a failure to survive. Japanese executives should ask themselves whether their leadership, business strategies and processes support or constrain innovation."
"Innovation has never been more important to Japanese companies. In this globally connected world, Japan is no longer an island and needs to redefine its understanding of innovation," said William H. Saito, president of Intecur and a foundation board member for the World Economic Forum. "The theme of this year's Summer Davos, 'Meeting the Innovation Imperative', was timely for many companies, institutions and especially countries. Innovation is very important at every level but it is difficult to stay ahead of fast moving global competitors. When countries get static in their approach to innovation this inertia starts to permeate all levels of government, corporations and academia. Developed countries, like Japan, will want to re-evaluate their approach to innovation in order to stay dynamic and competitive."
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. 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 anticipate 62.2% revenue growth over the next five years compared with 20.7% for the least innovative.
-- The combined revenue growth of the most innovative companies is forecast to be US$252 billion over next five years compared with US$93 billion among the least innovative.
-- Two-thirds of the most innovative companies say innovation is a competitive necessity compared with 19% among the least innovative.
-- Nearly 80% of the most innovative say they have a well-defined innovation strategy compared with 47% of the least innovative.
-- The most innovative companies are almost twice as likely to be targeting breakthrough and radical innovations.
-- The most innovative companies are more likely to use corporate venturing to drive growth: 13% vs. 7%.
-- The most innovative companies use social media more often to collaborate externally: 67% vs. 39%.
The PwC study can be obtained free of charge at www.pwc.com/innovationsurvey
Notes to editor
PwC surveyed 1,757 C-suite and executive-level respondents responsible for overseeing innovation within their company across more than 25 countries and 30 sectors. To our knowledge, this is the largest and most comprehensive study of C-suite executives exploring innovation from a global, multi-sector perspective.
The report includes commentary and case studies derived from in-depth interviews conducted from among the same pool of executives, and with PwC's Global Innovation Leaders. These insights are brought together into an Innovation Blueprint outlined in Chapter 3 of the report. The research was shaped by PwC in collaboration with consultancy Meridian West.
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