Today GE launches its second annual Global Innovation Barometer which is a study of almost 3,000 business leaders across 22 countries including France, Germany, Poland, Sweden and the UK. The Barometer conducted by independent research and consulting firm, StrategyOne, identifies some of the key drivers and deterrents of innovation and examines perceptions of business to some of the challenges and opportunities they face.

The Barometer is being published at a very challenging time economically and the pressure which business is under is reflected its results. Many economies, including the European economy, look to Innovation as being a key enabler of growth, the creation of employment and at the same time addressing some of the main social, economic and environmental challenges facing us. However, the continued uncertainty of the global economy has had a marked impact on companies’ ability to innovate, with nine out of 10 executives reporting increased difficulty accessing external funding or a conservative shift in appetite for risk. Specifically, 88 percent of respondents saw increased challenges accessing venture capital, private investment and government funding, while 77 percent reported a reduction or reevaluation of the company’s willingness to take risks. Respondents in France (89%), UK (88%) and Germany (84%) reported increased difficulties accessing capital for innovation during due to the economic crisis among the highest out of the 22 countries surveyed.

Innovation and Growth Inextricably Linked
The results also indicate that executives believe that innovation and competitiveness are more connected than ever before. By comparing survey results to external economic data, the report also shows that, in the main, countries where innovation policies are perceived as more competitive actually delivered more growth than those countries whose policy frameworks are perceived as less competitive.

• 92 percent of executives said innovation is the main ingredient for a more competitive national economy, and 86 percent agreed that innovation is the best way to create jobs in their country.

• Markets where business is most satisfied with the perceived political and social environment for innovation delivered higher GDP growth (5.19 percent average) than those markets where business feels anxious or threatened by policies (2.32 percent average). Poland is an exception to this reporting some of the lowest satisfaction levels but strong growth.

• Israel, UAE, Sweden and Singapore reported the highest levels of satisfaction with their domestic innovation environment, while Japan Russia, Poland and France reported the lowest satisfaction levels.

The survey showed that companies’ internal investments in innovation, from R&D budgets to the pursuit of new products or business models, are particularly at risk when the business community perceives a negative shift or deterioration of government policies that support innovation.

• 71 percent 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 company’s R&D spend.

• Globally, business reported the least level of satisfaction (42 percent) with the efficiency and coordination of government support .

European Business Among The Most Negative About The Environment For Innovation:
With the exception of Sweden, which is the third highest globally, European respondents to the survey were among the most negative about the innovation context in their respective countries falling below the global average in this ranking. In this regard Poland, France and the UK were among the bottom five out of the 22 countries included in the survey just ahead of Japan and Russia.

While respondents in the European countries included in the survey were negative about the domestic innovation context the global perception of many European countries as Innovation Hubs .is very positive. Germany is ranked second out of the top 30 countries after the USA.
The UK, France, Sweden are all included in the top ten. While Italy, Switzerland, Finland, Norway, Netherlands, Europe and the EU as a whole, Spain and Denmark are all ranked by the respondents in the top 30 Innovation Champions globally.

Companies Embrace New Approach to Innovation
The study also sees a marked shift in the model for innovation. Companies are moving beyond the traditional, closed model of innovation and embracing a new paradigm, one that engenders collaboration between several partners, values the creative power of smaller organisations and individuals, and tailors solutions to meet local needs. Business leaders around the world agree that great innovations in the 21st century will be about shared value, addressing both human needs and the bottom line, versus delivering profit alone.

• 88 percent of executives believe that the way companies will innovate in the 21st century is totally different than ever before.

• 77 percent of executives acknowledged that individuals and SMEs have the ability to be as innovative as large companies.

• 73 percent agreed that innovation will be driven by people’s creativity over scientific research.

However, a disconnect surfaced between the importance of partnerships and the need to pursue them in the near term. A “partnership paradox” presented itself in that 86 percent believe partnerships are an important component of the new model of innovation, but only 21 percent believe finding partners is an immediate priority to innovate more on a day-to-day basis.

No One-Size-Fits-All Approach
Above all, the Barometer clearly demonstrates that while innovation at the global level continues to move towards an open, more collaborative model, 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. Not only do the environments change dramatically from country to country, but so do the perceptions of where innovation can be most effective, and who is most likely to drive.

For more information on this study and a detailed report on results, visit: www.GE.com/innovationbarometer.

Also, follow me on Twitter @hughgillanders.

About the Author: Hugh Gillanders is the Director of Public Affairs for GE Europe (General Electric Company). Mr. Gillanders is responsible for the development and implementation of the Public Affairs and engagement strategy for GE in Europe and the EU.

Author : ge_europe
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