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A.T. Kearney and IMP(3)rove Academy: 57 percent of corporations analyzed have insufficient capabilities to manage global innovation

Six in 10 executives expect to lose more than 20 percent of revenues from disruptive innovations within five years

CHICAGO, Aug. 16, 2016 /PRNewswire/ -- Corporations rely on their innovation capabilities to drive future revenues. A new report by A.T. Kearney and IMP3rove Academy, "The Management of Global Innovation: Business Expectations for 2020," will be released in conjunction with the Global Innovation Index (GII) launch on 15 August in Geneva and shows that innovation pressure is rising substantially. To succeed in this environment, executives expect innovation management to become both more global and more collaborative. However, more international participants make innovation more complex and more challenging. Fifty-seven percent of corporations say they are not set up to manage these challenges.

A.T. Kearney Logo.

The stakes are high. Six out of 10 executives believe that digitization, the Internet of Things, artificial intelligence, and other disruptive innovations could cost them 20 percent of their revenues within five years if they do not change the way they work.

Johan Aurik, managing partner and chairman of the board of A.T. Kearney, says, "Digital technologies have reached a level of maturity where they are disrupting the way we work. This has a significant impact on innovation: digital and social media, sharing platforms, and 3D printing, for example, make it possible for companies to collaborate more broadly and effectively, independent of their location. They can now 'crowd source' the entrepreneurial spirit, expertise, and knowledge of employees, customers, outside experts, and start-ups from around the globe."

The changes we see: Increasingly global, collaborative, and complex

"Conducted as part of our work for the new Global Innovation Index (GII), our research shows that 70 percent of companies say that their innovation processes are becoming increasingly global, regardless of whether the company's footprint is local or global," says Kai Engel, lead partner of A.T. Kearney's Innovation and R&D Management Practice. "It's not just the players' locations that are changing, it is also the players themselves: 78 percent of companies will work more closely with their customers, 67 percent will add start-ups to their innovation ecosystem, and 45 percent say they will collaborate more with research and academic institutions."

With an increasing number of players located across the globe, innovation becomes more complex. Different cultures, different backgrounds, potentially different goals have to be aligned to make a global innovation ecosystem work. Executing a global innovation strategy and creating lasting value is a challenging task for any organization.

Science and innovation are already more international and collaborative than ever. One example is the International Space Station, the most complex international scientific and engineering project ever executed, which is the result of a global collaboration between the US, Russia, Europe, Japan, and Canada.

Many companies admit that they do not excel at implementing their innovations. Fifty-seven percent of the corporations that A.T. Kearney analyzed rate their internal capabilities to manage global innovation as very poor, poor, or fair. These companies believe their innovation governance structures and processes, and their ability to identify, select, build and operate, and exit global innovation partnerships are inadequate to overcome the challenges of global innovation.

This also explains why most companies based in high-income countries, and nearly all firms in emerging markets, run their innovation as a central function from their corporate headquarters. Geographic proximity gives executives in these companies a sense of security and control in an increasingly complex environment.

Continuing his comments on the findings, Engel says, "Managing global innovation ecosystems is a demanding task for any organization, and our research findings suggest a clear call to action: to execute these challenges effectively, corporations need to develop their ability to make global innovation work. The ideas themselves are there, but there's a lack of innovation management."

Martin Ruppert, managing director of IMP3rove Academy, noted, "Finding innovation partners no longer depends on personal networks. Digitization has changed the way innovation partners are identified. A long list of potential global partners can be built within seconds by using web crawlers. Global databases can be used to evaluate these partners by measuring their innovation capabilities relative to leading competitors."

Violetka Direlea, A.T. Kearney partner and leader of the firm's Innovation Practice, stated, "To get in the game, effective innovation requires nimble execution. We hear the call from innovators and start-ups loud and clear. They find it cumbersome, complicated, and admin-heavy to work with global corporations. Just to be listed as a potential supplier, for example, is a burden that can overwhelm small companies."

For a copy of the A.T. Kearney report "The Management of Global Innovation: Business Expectations for 2020," please go to https://www.atkearney.com/innovation/global-innovation-index.

About the Global Innovation Index
The Global Innovation Index 2016 (GII), in its 9th edition this year, is co-published by Cornell University, INSEAD, and the World Intellectual Property Organization (WIPO, an agency of the UN). The core of the GII report consists of a ranking of world economies' innovation capabilities and results, and includes indicators that go beyond the traditional measures of innovation such as the level of research and development. A.T. Kearney is a knowledge partner to the GII. For more information, please visit www.globalinnovationindex.org.

About A.T. Kearney
A.T. Kearney is a leading global management consulting firm with offices in more than 40 countries. Since 1926, we have been trusted advisors to the world's foremost organizations. A.T. Kearney is a partner-owned firm, committed to helping clients achieve immediate impact and growing advantage on their most mission-critical issues. For more information, visit www.atkearney.com.

About IMP3rove – European Innovation Management Academy
IMP3rove – European Innovation Management Academy offers innovation management benchmarking, advisory services, and training. With a holistic approach to innovation management and a global network, IMP3rove Academy sets the standard for innovation management assessment and related support services. IMP³rove Academy emerged from the European Commission's flagship program "IMP3rove." For more information, visit www.improve-innovation.eu.

Contact: Jim Brown   A.T. Kearney
Phone: +1 312 223 6220
Email: [email protected]  

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