The combination of falling industrial production in the Euro Zone, fears of rising inflation in China, and volatility in the U.S. as Washington moves from the fiscal cliff to debt ceiling negotiations is enough to make many executives dizzy. Now say hello to the “innovation vertigo.”
GE’s Global Innovation Barometer, an annual survey of 3,000 executives from 25 countries that the company released today, found that the complex and rapidly shifting business environment is creating anxiety among business leaders about their ability to innovate and prosper. What are symptoms of this “innovation vertigo?”
Consider that 71 percent of respondents seemed to embrace protectionism, saying that local governments should give priority to promoting domestic innovation. But square that with the same percentage of executives who said that local governments should do more to promote the free flow of ideas, goods, and services. Some 53 percent of respondents were in both groups.
This means that corporate leaders continue to value innovation as a strategic priority. But many are concerned about their ability to maintain a competitive edge in a fast paced, globalized world defined by shrinking resources.
One person’s alarm, however, can be another one’s opportunity. Many executives seem to be embracing the new complexity by exploring new and sometimes unexpected ways to innovate. For example, a growing number of respondents, 52 percent, believe that the development of new business models will contribute the most to their company’s future performance. Some 87 percent were 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. Other companies are moving beyond product and incremental innovation to developing innovative business plans that offer a less risky and resource-intense way to open new markets.
Beth Comstock, GE’s senior vice president and chief marketing officer, said that “innovators must be resilient or risk being left behind.”
“Change has become constant and we see leaders responding by betting big on more unconventional approaches to innovation to unlock growth, Comstock said. “At GE, we are exploring different markets, partnerships structures and business models – all in the pursuit of uncovering new ways to better serve our customers and meet the world’s biggest challenges head on.”
Executives also appear to see an important role for government in clarifying the policy environment affecting innovation. Business leaders want governments to focus on education, limiting bureaucracy and to a lesser degree, protecting trade secrets.
Finally, the surveyed group found good talent increasingly hard to find. Some said 41 percent said that restrictions on access to foreign talent are increasing.
The third annual Innovation Barometer was commissioned by GE and conducted by independent research and consulting firm StrategyOne to explore how business leaders around the world view drivers and barriers to innovation and how those perceptions influence strategy. GE expanded the study this year by surveying more than 3,000 senior business executives in 25 countries, all with direct involvement in their companies’ innovation strategy and decision making.
For more coverage of the Global Innovation Barometer visit IdeasLab. Marco Annunziata, GE’s chief economist, says in his IdeasLab post that this year’s GE Global Innovation Barometer results call for greater risks from business leaders and more openness from governments.