NGM Study findings on the results of innovation and what characterizes world-class innovators
The study found that manufacturers may not be getting the most out of their customer-focused innovation. Among all manufacturers surveyed, 70% commercialized less than 25% of their R&D expenses. Those manufacturers who identified themselves as at or near world-class innovation, however, enjoyed more return on their R&D investment both in new products and greater profits. Seventy percent of these manufacturers derived more than 5% of sales from products introduced in the past three years.
Overall, the decline in R&D investment discussed in last week’s blog may be affecting new product output. In 2011, 60% of all manufacturers report that 5% of sales are derived from products introduced in the past three years, a drop of 10 percentage points from 2009. Only 54% of manufacturers who identified themselves as furthest from world-class innovation generated more than 5% of sales from products introduced in the past three years. This discrepancy indicates those manufacturers who are far from world-class status may be losing out on revenue and the problem will likely grow with time as they fall farther behind competitors.
What does it take to be a world-class innovator? While there are many successful strategies, world-class innovators share some common characteristics. The manufacturers near or at world-class status are more likely to have:
• Sufficient talent and development programs to drive world-class innovation,
• State-of-the-art business systems and equipment,
• Higher investments in innovation, and
• Advanced methods to measure return from customer-focused innovation.
For those looking to become world-class innovators, a personalized strategy for achieving each of these characteristics will generate the best results. World-class innovators recognize each of these characteristics is related and no single characteristic will produce great results.
Your company may have strengths in many of these areas, but is still not achieving the desired level of innovation. An IMEC representative can bring a fresh set of eyes to the situation and identify the best strategy for your company to work towards world-class innovation. If you are interested in learning more about how IMEC can help your company identify ways to drive innovation, contact one of our representatives.
