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Illustration: Aïda Amer/Axios

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."

Go deeper

Senate eyes tech firms' data troves

Illustration: Sarah Grillo/Axios

Lawmakers mulling how to tighten antitrust laws' reins over online platforms will grill Google and Facebook Tuesday about a key asset in the digital age: data.

Why it matters: The intersection of data collection and competition policy is a particularly vulnerable point for the tech giants, whose power comes from amassing troves of information about users.

Inside Biden's Taiwan flubs

Illustration: Aïda Amer/Axios

Twice this year, President Biden has blurted out commitments that the U.S. is prepared to defend Taiwan against a Chinese invasion — forcing the White House to walk back his statements and leading to confusion over a high-stakes national security policy.

Why it matters: U.S. defense officials have publicly aired their concerns that China will take Taiwan by force in the next four to six years, perhaps sooner. The president's position on this question may soon have real-world, life and death consequences.

"Atmospheric river" to whiplash Northern California from drought to flood

A map depicting 24-hour preciptation forecast (inches) ending Monday at 5a.m. local time. Photo: NOAA

A series of powerful "atmospheric river" storms are set dump historic amounts of rainfall across parts of drought-stricken California and the Pacific Northwest from this weekend, forecasters warn.

Why it matters: A strong atmospheric river, packing large amounts of moisture, is predicted to whiplash Northern California from drought to flood.