Executive Briefings

Is Investing in Innovation Paying Off? A Study Suggests Maybe Not.

By now it is almost gospel that investing in innovative new products and services helps a company's long-term success. That doesn't mean it's easy. A new study from Accenture, "Why 'Low Risk' Innovation Is Costly," found that fewer than one in five chief executives believes his strategic investments in innovation are paying off, and that this poor track record is starting to discourage companies from taking risks.

Is Investing in Innovation Paying Off? A Study Suggests Maybe Not.

For the study, Accenture surveyed 519 companies across more than 12 industry sectors in France, Britain and the U.S. Half (51 percent) of survey respondents reported they had recently increased funding for innovation at their companies. Almost all (93 percent) said the long-term success of their organization's business strategy depends on their ability to innovate.

Despite the importance they assign to this innovate-or-die business rationale, just 18 percent of CEOs say they're seeing their investments in innovation pay off. At the same time, 46 percent of the executives surveyed said their company had become more risk averse when considering new breakthrough ideas, the study found.

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For the study, Accenture surveyed 519 companies across more than 12 industry sectors in France, Britain and the U.S. Half (51 percent) of survey respondents reported they had recently increased funding for innovation at their companies. Almost all (93 percent) said the long-term success of their organization's business strategy depends on their ability to innovate.

Despite the importance they assign to this innovate-or-die business rationale, just 18 percent of CEOs say they're seeing their investments in innovation pay off. At the same time, 46 percent of the executives surveyed said their company had become more risk averse when considering new breakthrough ideas, the study found.

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Is Investing in Innovation Paying Off? A Study Suggests Maybe Not.