In brief

In brief

  • A significant amount of money, to the tune of $3.2 trillion, has been spent on innovation-related activities over the last 5 years.
  • To convert that investment into value, companies need to put innovation to work, at the right pace and in the right place.
  • Learn how high-growth companies we surveyed are turning innovation investments into value with success, from the characteristics they have in common to their distinct approach to innovation.



From genetics to space exploration to quantum computing, we are living in a time when investment in, and expectations from, tech-fueled innovation are skyrocketing.

Opportunities created by technological advances are more abundant than ever. And with the performance of advanced technologies vastly improving, the potential for innovation feels limitless. This is enticing many companies to focus on innovation more extensively.

That’s good news for executives. In fact, our survey shows that a majority of companies are planning to increase investments in innovation by more than 25% over the next five years.


$3.2T+

has been spent by companies on innovation-related activities over the past 5 years.

1OUT OF3

said they plan to ramp up their investments by more than 50%. That’s a 1.8x increase compared to the past five years.


But there is a challenge. Though opportunities are abundant, many companies struggle with how to fully realize the value from their investments in innovation. In fact, our research shows that spending is increasing, but returns are decreasing.


Based on Accenture analysis:

57%

of respondents, who increased their investments in innovation by more than 25% underperformed their industry peers.

27%

decline on the return on innovation-related spending over the past 5 years.


High-growth companies, however, are succeeding in turning innovation investments into value. Who are they? These are companies that know how to put innovation to work, at the right pace and in the right place.

Our research reveals they exhibit seven key characteristics that are adopted by practicing innovation deliberately.


Explore the seven characteristics

Hyper Relevant

Sensing and addressing the changing needs of customers.

Technology Propelled

Mastering leading edge technologies that drive innovation.

Data Driven

Deliver new product and service innovations safely.

Asset Smart

Adopting intelligent asset and operations management to ensure businesses run efficiently.

Network Powered

Harnessing the power of a carefully managed ecosystem to bring innovations to customers.

Talent Rich

Adapting to the changing expectations and trends in the workforce to gain a competitive advantage with top talent.

Inclusive

Incorporating a broader range of stakeholders.


Innovate for Change

As high-growth companies innovate for change across these seven characteristics they are releasing value to reinvent the way they do business.

Consider Equinox, the upscale gym brand that is investing in technology-enabled innovation with success. Heavy investments in AI and mobile apps led to solutions like a "digital coach" bot, which learns from members' activities and wellness goals. Then, it puts those insights to work, curating digital content, optimizing schedules for each location and hiring the right talent to teach classes. It could even identify what kind of exercisers its members are and nudge them toward certain activities.

The result? Within six months of product launch, Equinox reported that mobile app check-ins were up 40% compared to nonusers.

Equinox also used a network powered ecosystem of partners to help in its quest to deliver better member experiences. Strategic partnerships have further strengthened talent investments to provide better classes for members. And for Equinox's biggest bet - and expansion into wellness tourism in 2019 with the Equinox Hotel, further expanding its revenue channels and engagement with members. In short, the Equinox example shows how the company used an opportunity to unlock trapped value in its business of serving fitness-oriented customers.

What's trapped value? Simply put, it's the gap between what's possible and what's being achieved today. Every business, in every industry has some trapped value.

Here's where trapped value can be found:

ENTERPRISE

ENTERPRISE

Enterprise trapped value exists when an economic opportunity is visible, but unreachable. This means it can’t be unlocked by existing business models or capabilities.

INDUSTRY

INDUSTRY

Industry trapped value exists when a few companies are reaping rewards where others could also benefit, or where partnerships that would accelerate innovation aren't being pursued.

CONSUMERS

CONSUMERS

Consumer trapped value exists when there’s a cost burden for the consumer, like international call costs.

SOCIETY

SOCIETY

Societal trapped value exists when commercial activities aren’t creating benefits, like job creation, for the general public.

"Too many companies see ‘innovation’ as something abstract from solving real problems and creating real value.”

Alison Kennedy
Senior Managing Director
Accenture Strategy

What can you do to seize new opportunities?

Based on their financial performance, we've identified a small group of high-growth companies - 14% - that are investing aggresively and are taking a distinct approach to innovation that is changed-oriented, outcome-led and disruption-minded.

Spanning industries from fashion to entertainment and energy, these high-growth companies have focused on changing at the fundamental level. They connect innovation efforts to financial performance and invest with disruptive innovation in mind.

So, what can we learn from these high-growth companies and what insights can be gleaned from the ways they have approached innovation?



About the research

Our research covers how companies across industries are unlocking trapped value, and how they can learn from the distinct approach and key characteristics of high-growth companies.

995

of the world’s largest companies were analyzed by revenue across 14 industries (such as Chemicals, Energy, Life Sciences, Retail among others) were, from 2000 to 2016. This analysis showed that few companies successfully release trapped value.

840

executives in 8 countries (including Australia, Canada, Japan, United Kingdom, the United States, among others) and across 14 industries (such as Chemicals, Energy, Life Sciences, Retail among others) were surveyed (as defined by Accenture Research).

For an expanded listing of the industries and countries we surveyed,
please view the full report details.



Omar Abbosh

Group Chief Executive – Communications, Media and Technology


Vedrana Savic

Managing Director – Thought Leadership


Paul Nunes

Global Managing Director – Thought Leadership


Michael Moore

Senior Principal – Thought Leadership

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