They understand that effective portfolio governance and management, especially with respect to data transparency, are key to driving impact.Capital Innovators appeared to be the VC, which was created in 2011. They leverage the power of innovation in AI, and regularly review the performance of innovation units or vehicles and shift resources toward centers of success. They drive digital innovation with a clear bias toward new digital products, agile teaming, and improving customer and marketing insights. They also are more likely to orchestrate or participate in ecosystems, engaging with external partners-and even competitors-on innovations. These companies use a wide array of strategic tools to strengthen their innovation platforms and practices and are much more aggressive in their use of M&A, targeting innovative technologies or processes, or acquiring leaders and employees with a demonstrated ability to innovate. While all companies on average expect to allocate more money toward incremental innovations close to the core, this small group of innovation-ready companies is allocating fully one-third of spending toward developing breakthrough innovations. Our 2023 survey found a near-record high level of innovation importance: 79% of companies ranked innovation among their top three priorities, up from 75% in 2022, and more than 40% expect to significantly increase spending this year, a jump of 16 percentage points over the last economic downturn in 2009.īut there is also an emerging group of companies that is going much further and putting innovation front and center in their future growth strategies. BCG’s 2023 global survey highlights the advantages of innovation and how leaders are outpacing others by using tools whose importance is climbing fast, such as M&A, portfolio planning, and AI. Once again, we see the most innovative companies producing greater shareholder returns and building resilience and advantage through innovation. The question is not whether AI can have an impact, but rather if companies are using AI properly and for use cases with the potential to drive real business value.īuilding Resilience and Advantage Through Innovation How Early Winners Are Unlocking AI’s Potentials Today, a growing number of companies are beginning to recognize the advantages of innovation, with 79% ranking it among their top three priorities (15 points more than in 2009) and 66% planning to increase spending (42% by more than 10%). During the 2009 downturn, only 58% of companies planned to increase spending and almost 15% expected to cut innovation investment. Explore the changing rankings and the rich history of innovation thought leadership. Harnoss, Konstantinos Apostolatos, Ramón Baeza, Ryoji Kimura, Michael Ward, Beth Viner, Jean-Manuel Izaret, Wendi Backler, Vladimir Lukic, Sylvain Duranton, and Romain de LaubierīCG started publishing an annual innovation report-with its list of the 50 companies most admired by global innovation executives-in 2005. Winners will continue to widen their lead until others reset their own priorities and investments for the future.īy Justin Manly, Michael Ringel, Amy MacDougall, Will Cornock, Johann D. The link between innovation and both growth and advantage is becoming stronger than ever. But while a majority of companies (61%) have invested in AI, far fewer (45%) have managed to translate this into business impact. “Ready” companies are using AI to rapidly expand innovation possibilities.This year, in stark contrast, 79% of companies see innovation as a top three priority, and 66% plan to increase spending-42% by more than 10%.

During the last recession (2009), less than two-thirds of companies ranked innovation as a top-three priority and only 58% planned to increase spending.Innovation-ready leaders (those that are ready to develop product, process, and business model innovations that can deliver sustainable impact) are pulling ahead by using innovation to build their resilience to economic uncertainty and fuel their pursuit of lower emissions.Some notable takeaways from this year’s report include: The laggards struggle to make real headway. Leaders at those firms are consistently delivering new products, entering new markets, and establishing new revenue streams. Technology, Media, and TelecommunicationsĬompanies that prioritize innovation and make sure they are ready to act are widening the gap over less capable competitors.

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