Drivers and Impediments to Innovation

A new study of global innovation from GE confirms the increasingly recognized belief that innovation is the main driver of prosperity, competitiveness and job creation, and reveals how challenging and uncertain economic and political environments hinder companies’ ability to deliver meaningful innovation.

The GE Global Innovation Barometer seeks to identify drivers and deterrents of innovation and to analyze perceptions around innovation opportunities and challenges. Nearly 3,000 senior business executives in 22 countries were surveyed on their companies’ innovation strategy and decision making for the report.

The continued uncertainty of the global economy has had a marked impact on companies’ ability to innovate, with nine out of 10 executives reporting increased difficulty accessing external funding or a conservative shift in appetite for risk. Specifically, 88 percent of respondents saw increased challenges accessing venture capital, private investment and government funding, while 77 percent reported a reduction or reevaluation of the company’s willingness to take risks.

The study focused on 13 indicators of an innovative environment:

1. The level of government support
2. The efficiency of government support
3. Trade regulations
4. IP and patent protections
5. The efficacy of public-private partnerships
6. The support of private investors
7. The preparedness of tomorrow’s innovators
8. The value the public places on innovation
9. The public appetite for innovation
10. The societal acceptance of risk-taking
11. The level of public support for business
12. The ease of partnership with academia
13. The speed of innovative products to market

Findings include:

• 92 percent of executives said that innovation is the main ingredient for a more competitive national economy, and 86 percent agreed that innovation is the best way to create jobs in their country.
• 88 percent of executives believe that the way companies will innovate in the 21^st century is totally different than ever before.
• 77 percent of executives acknowledged that individuals and small- to mid-sized enterprises have the ability to be as innovative as large companies.
• 73 percent agreed that innovation will be driven by people’s creativity over scientific research.
• Markets where business is most satisfied with the perceived political and social environment for innovation delivered higher GDP growth (5.19 percent average) than those markets where business feels anxious or threatened by policies (2.32 percent average).
• The survey showed that companies’ internal investments in innovation, from research and development budgets to the pursuit of new products or business models, are particularly at risk when the business community perceives a negative shift or deterioration of government policies that support innovation.
• 71 percent of executives that reported an unfavorable change in external policy or government budget priorities as a result of the global financial crisis also reported cuts in their own company’s R&D spending.
• Globally, business reported the least level of satisfaction (42 percent) with the efficiency and coordination of government support for innovation.

Read the Report

Source: GE