A new survey of large corporations shows the pandemic has driven home the need for innovation, while demonstrating just how hard it is to do.
Why it matters: In an exponential age, companies that can keep successfully innovating can reap outsized rewards, while those that fail risk being left permanently behind.
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What's happening: The software company Wellspring surveyed 300 high-level executives at $1 billion-plus revenue companies in the U.S. and UK about how the pandemic affected their innovation operations, and shared the results first with Axios.
60% of the respondents reported they expected their corporate innovation budgets were expected to increase out of the pandemic, while just 10% expected budgets to be cut.
"The pandemic highlighted the need for science," says Robert Lowe, Wellspring's CEO and co-founder. "But there's also a lot of innovation around how companies think about what they do and how they re-engage with customers."
By the numbers: 62% of the companies experiencing what Wellspring characterizes as "breakaway innovation growth" said they have full-time teams dedicated to open innovation and/or technology scouting — the sourcing of emerging technologies or partners.
Nearly half of respondents at those companies say their partners include governments, which Lowe notes are still "the largest funders of research."
The other side: Companies that reported struggling with innovation tend to lack buy in at the C-suite level, with broad goals at the top foundering in the face of parochial concerns and day-to-day priorities on the ground level.
That failure can produce an existential threat, says Lowe. "In the past if you were a major company with large market share, you held onto your distribution channel and it was hard to get around you. That barrier just doesn't exist anymore"
The bottom line: "If you're an innovation laggard in any industry," says Lowe, "the penalty now is far worse."
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