The Middle East has huge potential for growth based on the opportunities that tech-enabled innovations present. But, the region is not yet realizing its full potential when it comes to innovation, leaving many vulnerable to disruption.
To find out why, Accenture embarked on a research project to explore how disruption is playing out in the Middle East. We wanted to find out how much value is at risk, and how prepared companies are to fight back.
On the wrong side of disruption
Our research found that 63 percent of Middle Eastern organizations are “omni-trapped”—meaning that they struggle to use innovation effectively to raise current performance or to build future growth. Only 11 percent of enterprises are exploiting opportunities to free up trapped value—the potential value available that companies are failing to realize.
We analyzed the top 200 companies in 18 industries in Saudi Arabia and the United Arab Emirates across 15 factors. We wanted to gauge both the current level of disruption and susceptibility to future disruption. We found that 45 percent of companies are experiencing disruption today and 44 percent are susceptible to future disruption.
Why it matters for companies
In October last year, I attended an innovation forum hosted by Bloomberg in Dubai that included both private and government organizations. What I learned confirmed many of the insights present in this research: executives acknowledged that their industries will be disrupted—and many are not prepared for the disruption journey.
In our survey, 60 percent of respondents said they expect significant disruption in their industry in the next three years. And 42 percent said their companies are not ready to face disruption.
Our research shows that if Middle Eastern companies do not innovate and release trapped value, their enterprises could lose US$442 billion due to current and future disruption.
What companies can do
By analyzing high-growth companies, we found that innovation is essential in the age of disruption. Innovation helps companies to unlock trapped value and fall on the winning side of disruption.
It also enables companies to successfully manage their disruption journey by growing their core business and building their future business—a strategy we refer to as a “wise pivot.”
After studying these high-growth companies, we created the Accenture Innovation Maturity Index which measures how companies in the Middle East are fighting back.
Our research identified only a small group of innovation champions in the Middle East—6 percent of the sample—that scored 73 out of 100 points on the Innovation Maturity Index (the overall score was 56).
These companies are executing a wise pivot most effectively. They are reinventing themselves and harnessing the power of disruption—using data, digital tools and new ways of working.
What did these “Innovation Champions” get right?
First, they created a smooth, reliable, and repeatable innovation process—defining a strategy, creating a culture that rewards innovation, and building formal innovation architecture. Second, they’ve undertaken a fundamental organizational change that embeds innovation across the enterprise and makes it part of everyday business.
Our research found that successful innovators, and companies that consistently release trapped value, share seven traits. They are: Hyper relevant, network-powered, technology-propelled, asset-smart, inclusive, talent rich, and data-driven.
Are you ready to innovate and thrive in the age of disruption? Download the Innovation Maturity Index report to find out how you can become an innovation champion.