The Boston Consulting Group has released its annual report on the state of corporate innovation. It’s rather interesting to note the press coverage that the report has spawned. Strangely, the commentary seems to focus on a reported increase in the number of companies forecasting a decrease in R&D spending. Even self-proclaimed innovation guru, Bruce Nussbaum, reported on his blog that “most corporations are cutting back on R&D and other innovation investments.” It makes one wonder if anyone actually read the report.
I did, and I suggest you do too. There are some very good insights in the report. Until you get around to it, here are some of the highlights.
While the economic crisis has caused some companies to lower the priority of innovation, most companies (64%) still consider innovation a strategy priority. This priority is quite justified. The BCG report cites that there is a strong connection between innovation competence and corporate success. Putting their money where their mouth is, fifty-eight percent of participating companies plan to increase their spending on R&D. Many of these companies plan to shift the emphasis of their innovation to cost control. Only 14% plan to reduce their innovation spend.
CEOs are considered the most visible champions of innovation, yet few CEOs see themselves this way. This represents a serious gap in the expectations of management and innovation workers and may be a factor contributing to why only slightly more than half of the respondents are happy with the return on their company’s innovation spend.
The report also finds that there is a tendency to pull back on innovation investment in rapidly developing economies, with innovation taking on a more local flavor. It will be interesting to see if this is an early indicator validating Nussbaum’s recent prediction of a slowdown in globalization.
Responding companies identify their biggest innovation challenge is move from an idea to a delivered product. This isn’t very surprising. All too many organizations confuse ideation with innovation. The emphasis on collecting lots of ideas rather than the full cycle innovation best practices undermines the ability of organizations to achieve their innovation objectives.
The BCG report is full on other fascinating information. You can find the full report here.
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