Only 43% companies are highly effective at generating new ideas
THE GLOBAL INNOVATION INDEX 2013 Foreword
A Virtuous Circle of Innovation
Booz & Company is honoured to be a Knowledge Partner in the Global Innovation Index report for the third consecutive year. This work is a vital part of our continuing efforts to illuminate the nature and mecha- nisms of innovation and to assist companies and govern- ments globally as they seek to capture its rich economic and social returns.
One disturbing reality that our research has turned up is a major fault line at the front end of innovation. Booz & Company’s most recent Global Innovation 1000 study revealed that just 43% of senior innovation executives and chief technology officers at nearly 700 companies believe their organizations are highly effective at generating new ideas, and only 36% believe they are highly effective at converting ideas to product development projects. Still fewer – one quarter of respondents – indicate that their organizations are highly effective at both.
This year’s Global Innovation Index report is especially timely because it explores a proven solution to the conundrum at the front end of innovation: the innovation hub. As innovation hubs such as Silicon Valley in the United States and the Daedeok Innopolis in the Republic of Korea have demonstrated, idea generation and conversion flourish in these robust ecosystems. Moreover, success begets success: as the companies in these hubs prosper, they invest more in research and development and attract more talent. They produce more ideas and convert more of those ideas into successful products. A virtuous circle is created. For this reason, innovation hubs should be of intense interest to companies and governments worldwide.
There are several models for innovation hubs. In every case we have examined, large enterprises—hub champions—have played a central role in hub develop-ment and success. These champions support innovation hubs by providing capital and connections, by facilitat- ing knowledge creation and sharing, and by providing a bridge for the commercialization of ideas.
Governments, especially in emerging economies, play an equally important role. Their policies attract enterprise champions and create fertile conditions for hub growth by providing direct investment, streamlining business and logistical processes, and ensuring the availability of talent.
Innovation is the process by which ideas are generated and commercialized, and innovation hubs can help elevate that process to the level of a differentiating capa- bility. We at Booz & Company are convinced that such capabilities are an essential mechanism in the achievement of a company’s, or a nation’s, larger strategy—what we call its ‘way to play’. A truly differentiating capa- bilities system is difficult to develop, but, likewise, it is hard for others to replicate. Thus it offers a sustainable competitive advantage that provides the right to win in the market.
We believe that both the public and private sectors have important roles to play in the formation of healthy innovation ecosystems. Furthermore, when they work together, as they do in developing innovation hubs, they can raise their innovation capabilities to new heights and drive corporate and national prosperity.
~ Curated by TME, World of Marketing, July 3, 2013. Source: Cesare R. Mainardi Chief Executive Officer Booz & Company, The Global Innovation Index, 2013.