Perhaps more than ever, business executives around the world believe that innovation and growth are inextricably linked.
That's the conclusion of General Electric's second-annual "Global Innovation Barometer," in which 92% of executives said innovation is the main ingredient of a more competitive national economy and 86% agreed that innovation is the best way to create jobs in their respective countries.
The survey of 2,800 senior executives in 22 countries also found that markets where the business community is most satisfied with the perceived political and social environment for innovation delivered higher GDP growth (5.19% average) than those markets where businesses feel anxious or threatened by policies (2.32% average).
While executives appreciate the importance of innovation more than ever, the continued uncertainty of the global economy has made it harder for their companies to innovate, the barometer found.
"We see these results, in some ways, as a rallying cry for business leaders to understand where and how their innovation strategies are being challenged and to drive to new models," said Beth Comstock, senior vice president and chief marketing officer at GE.
"Innovation is a powerful lever to address the challenges of a growing world. It allows us to use resources more efficiently, produce more with less and deliver better technologies to help markets drive economic growth and better quality of life."
The survey shows that companies' internal investments in innovation -- from R&D budgets to the pursuit of new products or business models -- are particularly sensitive to perceived shifts in government policies that support innovation, GE noted.
Some 71% of executives that reported an unfavorable change in external-policy or government-budget priorities as a result of the global financial crisis also reported cuts in their own companies' R&D spending.
Globally, business reported the least level of satisfaction (42%) with the efficiency and coordination of government support for innovation.
"Investing in innovation is a critical piece of global competitiveness and it comes in many forms -- from traditional R&D to new products, markets and business models," said Comstock.
"Cutbacks today will have reverberations on economic and social progress for years to come, and may seriously hinder a company's ability to compete. Governments and businesses both need to do their part to shore up the fragile innovation ecosystem."
A New Innovation Model
The 2012 study, according to GE, validates the findings of its inaugural barometer report -- "that companies are moving beyond the traditional, closed model of innovation" and embracing one "that engenders collaboration between several partners, values the creative power of smaller organizations and individuals, and tailors solutions to meet local needs."
Some 88% of executives agreed that the way companies will innovate in the 21st century will be totally different than in the past.
Meanwhile, 73% agreed that innovation will be driven by people's creativity over scientific research.
However, the survey findings point to a disconnect between the importance of partnerships and the need to pursue them in the near term, GE noted.
In the survey, 86% of global executives indicated they believe that partnerships are an important component of the new model of innovation, but only 21% believe finding partners is an immediate priority to innovate more on a day-to-day basis.
No One-Size-Fits-All Approach
While innovation at the global level continues to move toward a more collaborative model, the survey showed that "innovation at the local level presents a complex landscape of challenges and opportunities that cannot be addressed in broad strokes, but that must be understood and dealt with at the market level," GE explained.
The innovation environments change dramatically from country to country, GE noted, as do the perceptions of where innovation can be most effective and who is most likely to drive it.
"Creating conditions for meaningful innovation requires the right blend of internal and external factors that can readily be adapted to meet individual market and customer needs," Comstock said.
"Fortunately, this year's study suggests that companies interested in competing are up for the challenge, ready to adopt and deploy a modern approach to innovation that will deliver both value and meaningful solutions."
