A half-hearted approach to innovation could undermine the potential of the UK’s economic recovery, future growth and competitiveness, says PwC in its report, Breakthrough Innovation and Growth, released yesterday.
PwC conducted interviews with 1,757 senior executives, including 201 companies in the UK with average revenues of £1bn.
The findings reveal how the most innovative 20% of companies (globally) have revenue growth expectations on average £320m greater than the bottom 20% over the next five years, and how the UK’s most innovative companies grew on average 50% faster than the least innovative over the last three years.
Yet only 32% of UK companies see innovation as ‘very important’ to their success, compared to 46% of German firms, 56% of Chinese companies and a global average of 43%. The most innovative 20% of UK companies recognise the importance of innovation as a mainstream activity that must be sponsored by senior management and run in a structured way, but the picture outside this group is less encouraging.
David Percival, partner, PwC, said: “From medical diagnostics to aviation, whole industries have been turned upside down by innovation. Domestic and foreign competitors will soon crowd into the markets of less innovative companies. Those standing still will find themselves washed away in the new wave of growth.”
Industrial, cultural and recent economic history play a part in the UK’s diminished interest in innovation. The move away from manufacturing towards financial services in the 1980s was part of a trend that has led to many UK companies approaching innovation in an arbitrary fashion. Such companies are falling behind international competitors in terms of growth.
For instance, a significantly lower number of UK companies (62%) believe it’s important to recognise and reward innovation activities compared with a global average of 74%. And a significantly lower proportion of UK respondents say that senior executive participation is important to foster an innovative culture.
The Manufacturer is running the Inspiring Innovation in Manufacturing conference on October 16 in London. Speakers at the event include James Godman of AgustaWestland and Stephen Cousins of Axon Automotive. For more information and to book visit www.themanufacturer.com/eventsite/innovation2013/