A recent global research conducted by Accenture, a professional services firm has revealed that although global businesses, including Nigerian businesses are increasing their innovation spend, the returns on investments declined by 27 per cent over the past five years.
The survey report, which sought to unlock the value of business innovation and investments, explained that almost one-third, which is about 29 per cent of those Accenture surveyed, expected to increase their investments in innovation by more than 50 per cent over the next five years.
According to new report, more than half, which is about 57 per cent of businesses making significant investments in innovation have underperformed against industry peers when it comes to growth or market value.
Analysing the report, the Managing Directir, Financial Services at Accenture, Toluleke Adenmosun, said: “The fact that return on investment overall is dropping is a worrying trend, business are spending more than ever, but their inability to see proper returns is shocking.”
According to Adenmosun, one of the reasons for this could be that many organisations still see innovation as a peripheral activity separate to the core business; an “ad-hoc creative process” rather than a set of practices that will fundamentally change their way of doing business.
“It’s like going jogging once a month and then expecting to be able to run a marathon, Adenmosun said.
“Over the last five years, roughly $3.2 trillion was spent on innovation worldwide. Yet, the study shows it is not how much you spend that matters, it is how you spend it. The companies bucking the trend and seeing the biggest returns are investing in bold, watershed moves rather than incremental shifts.
“The companies reaping the biggest rewards show a “go big or go home” mentality by investing in truly disruptive innovation projects, and don’t just tinker around the edges,” Adenmosun added.
Adenmosun, argued that some companies just chase the latest tech trends without thinking about how to connect what they are spending to the biggest problems or opportunities in their business.
The report also revealed that there were seven key characteristics that were adopted by companies deliberately driving innovation.