Survey: Firms budget more for innovation, but struggle with results
A new survey of large corporations shows the pandemic has driven home the need for innovation, while demonstrating just how hard it is to do.
Why it matters: In an exponential age, companies that can keep successfully innovating can reap outsized rewards, while those that fail, risk being left permanently behind.
What's happening: Software company Wellspring surveyed 300 high-level executives at $1 billion-plus revenue companies in the U.S. and U.K. about how the pandemic affected their innovation operations, and it shared the results first with Axios.
- 60% of the respondents reported they expected their corporate innovation budgets were expected to increase out of the pandemic, while just 10% expected budgets to be cut.
- "The pandemic highlighted the need for science," says Robert Lowe, Wellspring's CEO and co-founder. "But there's also a lot of innovation around how companies think about what they do and how they re-engage with customers."
By the numbers: 62% of the companies experiencing what Wellspring characterizes as "breakaway innovation growth" said they have full-time teams dedicated to open innovation and/or technology scouting — the sourcing of emerging technologies or partners.
- Nearly half of respondents at those companies say their partners include governments, which Lowe notes are still "the largest funders of research."
The other side: Companies that reported struggling with innovation tend to lack buy-in at the C-suite level, with broad goals at the top foundering in the face of parochial concerns and day-to-day priorities on the ground level.
- That failure can produce an existential threat, says Lowe. "In the past, if you were a major company with large market share, you held onto your distribution channel and it was hard to get around you. That barrier just doesn't exist anymore."
The bottom line: "If you're an innovation laggard in any industry," says Lowe, "the penalty now is far worse."