The gap between expectation and innovation continues to deepen across a variety of companies, from online advertising to devices. Although 93% of executives think long-term success depends on the ability to innovate, only one in eight believe their company's strategy delivers a competitive advantage.
Innovation -- defined as sustainable change that creates value in a market, according to Accenture -- doesn't lack commitment. It lacks understanding. Some 70% ranked innovation among their top five priorities, and 18% put it at the head of the list, according to an Accenture study released Monday. About 52% in the communications sector and 44% in manufacturing call innovation "extremely important," and a key enabler facilitating their respective company's response to persistent change.
During the next five years, companies need to determine ways to drive value from commitments in resources, said Adi Alon, a managing director in the Accenture innovation and product development practice. He said companies need to design innovation for speed and agility, leverage the power of digital, and find the balance between innovation and risk.
Although not covered in the report, Alon said for many companies the inability to measure and manage risk remains one of the biggest barriers to success.
Alon said digital analytics can support innovation because it provides insight into consumer trends and preferences. The majority of respondents invest in cloud and mobility technology to enhance their innovation capabilities -- 60% and 50%, respectively -- but only 31% invest in social media.
The report states that while personalization emerges as a decisive factor in the success of innovation, it becomes just as important for companies to mine social data that can optimize consumer experiences.
Despite economic concerns, 51% report an increase in funding that leads to new products and services in contrast to 10% whose funding declined. Retail at 32% and consumer goods at 34% are the least likely to invest, where investments are already high.
About 64% of respondents admit to being focused on product line extensions rather than big ideas, which could stifle growth. The proportion of executives who were likely to identify the introduction of a new product category as a primary goal for innovation fell to just 27%, compared with 42% in the 2009 study.
When asked about their satisfaction with the company's performance, survey respondents pointed to specific challenges to innovation. Some 30% cited predicting future trends; 27%, achieving cost containment; 26%, securing ongoing budget support and leveraging new technology; and 24%, transforming new ideas into marketable goods and services.