US$456 billion important.
That is how much the top 1000 Global companies spent on Innovation in 2017.
In fact between 2012 and 2017 they increased their innovation spend at a 6% CAGR.
Those stats would indicate that Innovation is incredibly important and the major companies are only seeing it as increasingly so.
A recent survey indicated that one third of executives expected their innovation spend to increase by 50% in the years 2017 to 2022.
87% of companies have a lab or space dedicated to innovation and there has been a 27% growth in innovation centers since 2016.
And the results of this spend?
No question that results are mixed.
Risk aversion, incrementalism, impatient capital, internal politics and misaligned incentives all hamper the effectiveness of innovation and innovation centers.
But those that are clear on the importance of Innovation, provide top leadership backing and can articulate what they want to achieve are having success.
Innovation can’t be a spray and pray exercise. It needs to be directed and result in tangible outcomes. Gone are the days where the view was that you just needed to spawn innovation everywhere and something of value would pop out.
Innovation is a process and there should be a clear objective in mind.
At Deloitte, we believe it should be about changing all or part of the organization’s business model to compete in a world of Industry 4.0 – a world where physical and digital collide.