After a period of adaptation and uncertainty, the international business landscape is witnessing a remarkable resurgence in innovation. In the five years since the first International Innovation Barometer (IIB), the prioritization of innovation has reached unprecedented levels. We delve into the key findings of the International Innovation Barometer (IIB) 2024, shedding light on the current state of innovation across various industries.
The Rising Importance of Innovation
In a clear shift of focus, businesses and governments worldwide are doubling down on innovation as the global economy inches towards normalcy. Ayming’s research reveals compelling statistics – 99% of businesses are engaged in innovation, 97% allocate a defined budget for it, and 89% maintain dedicated innovation teams. Among large firms, this commitment increases to an impressive 91%.
The IIB exposes the changing landscape of corporate priorities, with operational efficiency leading at 40%, closely followed by innovation at 38%. Even among CFOs and CEOs, innovation ranks as the third most significant priority.
Businesses are not only recognizing the importance of innovation but are also allocating substantial resources to fuel it. The IIB reveals that most organizations invest 5% or more of their revenues in innovation, with 55% allocating between 6 and 10%. On average, businesses dedicate 6.4% of their revenue to innovation, underscoring its critical role in maintaining competitiveness.
The data also indicates a significant increase in innovation spending compared to previous years. The number of organizations without a defined innovation budget has plummeted from 23% to just 3%.
Driving Innovation Through Technology
A driving force behind the surge in innovation spending is the demand for better technology. The IIB reports that 24% of IT/Technology respondents experienced a significant increase in their innovation budgets. Technology is indispensable in innovation, with the example of businesses developing specialized equipment in collaboration with technology firms.
The IIB explores the specific areas where companies are focusing their innovation efforts. Implementing new tools and technology emerges as the top priority at 34%, indicating a strong emphasis on technological advancements. Researching and understanding customer needs and optimizing operations closely follow at 29% each.
Surprisingly, artificial intelligence (AI) ranks joint sixth among innovation priorities, despite the substantial buzz surrounding AI. We anticipate a shift in the coming months, expecting AI to climb higher in the priority list as more companies initiate R&D projects in this domain.
Overcoming Obstacles to Innovation
While innovation is a top priority, businesses encounter internal challenges. The IIB identifies short-term focus and pressure for immediate results as the most common barrier (38%). This is followed by the availability of skills and talent, reflecting a persistent challenge in past Barometers.
The IIB underscores the need for a balanced strategy that includes both short- and long-term R&D to navigate the acceleration of innovation cycles. While skills and talent remain critical, companies might be increasingly relying on external resources, leading to a lower focus on fostering internal talent.
As innovation climbs higher on the priority list, businesses face practical challenges that can be addressed to enhance output. The IIB findings suggest a growing innovation growth cycle, necessitating ongoing investments to keep pace with evolving global demands.
Download our International Innovation Barometer 2024 to learn more about the proven tactics that the world’s most innovative leaders are using to succeed.
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