Booz Allen Global Innovation study shows rising R&D investments in 2011 … what about 2013?


The global innovation report is a yearly report showing R&D spendings across different industries. For reference, I have included the 2009 results by industry and the 2011 version below. The sectors which invest in R&D do not differ much from one year to another.

Although the report states that R&D investments doesn’t always mean that innovation is produced, or that this innovation is performing better than other products investments diluted across other budgets, there a precious few metrics that make it possible for us to measure how innovation is faring. So we’ll have to make do with this.

image_thumb[5]What the report shows as well is that rising investments mostly happe in America, whereas Europe was already deep in recession at that time. I can’t wait to see what the 2013 report will show.

At last, the report shows a strong correllation between sales and R&D investments. One could read this either of two ways: when sales are good, R&D investments grow, or … when R&D investments grow sales are better.

An interesting question would also be to wonder what is actually meant by R&D spending and whether all product development efforts are measured under that umbrella. I have seen a lot of companies in which R&D is kept as a separate effort and doesn’t represent the main area for product design and development ; this is significant in a world in which innovation is driven by vendors’ offerings, mostly in the Computing & Electronics world, the first sector for innovation in that study.s



R&D Spending Returns to Pre-Recession Levels, Finds Booz & Company Global Innovation 1000 Study | Innovation Management

key findings from this year’s Global Innovation 1000 study:

  • The three industries with the greatest R&D investment were computing and electronics, health, and automotive (28 percent, 21 percent, and 16 percent of the total Global Innovation 1000 spend, respectively).
  • Two-thirds of the $53 billion increase in R&D spending between 2010 and 2011 came from the computing and electronics, automotive, and industrials sectors.
  • 75 percent of companies increased their R&D spending from the previous year in 2011, up from 68 percent in 2010.
  • This year Amazon joined the top 10 “Most Innovative” companies pushing out Facebook. For the third straight year Samsung rose in rank on the list (to fourth place, up from seventh place last year), and Apple, Google, and 3M took the top three positions, respectively, also for the third consecutive year.
  • Regionally, companies based in North America grew their R&D spending by 9.7 percent—just above the global average of 9.6 percent—while Europe and Japan grew theirs at below-average rates of 5.4 percent and 2.4 percent, respectively.
  • India- and China-based firms again increased R&D investment at the highest rate overall across regions (27 percent on average), although from a small R&D spending base.

via R&D Spending Returns to Pre-Recession Levels, Finds Booz & Company Global Innovation 1000 Study | Innovation Management.

Duval Suggests Killing More ideas Fosters More Innovation

note: this article was originally compiled and written for the Orange Business Services Live blog

Bluenove’s Martin Duval is not only a successful entrepreneur and an open-minded innovator. He is also a controversial business writer with French flair who can deliver straight to the point conclusions. Whereas most would-be innovators will lay a stress on the production of new ideas – the ideation process – Duval knows, like most hardened innovators, that the truth lays not in that process but in the more delicate art of rejection and … killing innovations. Here are his thoughts on the subject, for the benefit of our readers:

Lately, I had a chance to describe the challenges faced by French start-ups with regard to the financing of the early innovation phase and the managing of partnerships with major corporations, and that piece was published by the French High Tech weekly 01 Informatique. In that article, entitled all players in the innovation chain should play their role!, I was stating that start-ups should only focus and partner with those corporations, which have implemented a structured and proactive business incubation and partnership programme such as NOVA External Venturing, part of the manufacturing industry behemoth Saint-Gobain, or the ‘Veolia Innovation Accelerator’. Amongst the new ‘Open Innovation’ processes which have been designed and implemented by those major corporations, I did point out the ability and the value of killing innovation and potential partnerships. I know that this may sound strange coming from a proponent of innovation but I insist, one has to learn how to say NO if one wants to get to YES.

What I mean by that is that start-ups by nature have limited resources and time to work their way through the complexity of a large organisations and handle their long-winded decision-making cycles. Therefore, when a large organisation is able to implement a process to efficiently filter out potential partners within a reasonable period of time, it is in fact sending out a positive rather than negative message. I would advise a 1 month or a 6 weeks-delay at the most as a fair period for a large organisation to get back to a candidate partner with a positive or negative answer. Delaying the response for any length of time and keeping start-up owners on tenterhooks is simply not on in my eyes. The start-up in question can then decide to keep trying to partner through another part of the organisation at its own risk, or to change what needs to be changed within its project structure or even look for another partner.

Ideally, the more a negative feedback is explained and detailed, the higher the value that is delivered: such explanations can help highlight the weaknesses within the original project, so as to better identify the target market position for the new solution. As a consequence, it is an easy way for corporations to deliver value and improve their reputation within their innovation ecosystem. It is certain though that rejecting an application actually requires a lot of preparation as well as some process and resources in order to produce the analysis and manage the follow-up the within 1 month to 1 ½ month.

As a matter of fact, rejection can take place at each gate within the open innovation stage-gate process with a higher probably and more preparation needed early in the process than ever after: from screening before initial contact, right after the initial contact and/or meeting, after the feasibility study, during the partnership negotiation and after the test. To a certain extent, I even believe that a good quality rejection process delivers more attraction and better corporate image than piecemeal success stories. Besides, that kind of process applies not only to start-ups but also to universities, government-owned or private R&D labs, suppliers and customers involved in crowd-sourcing initiatives etc.

At the end of the day, large organisations can derive a real high-end competitive edge from the management of rejections regarding innovation proposals from start-ups and other innovators. The tougher the process is, the more desirable those selective large organisations therefore become in the eyes of smaller players.

Similarly, when it comes to managing internal innovation processes, too little attention and effort is devoted to killing projects in my eyes. Oftentimes, a standard innovation pipeline is contrived – as part of an innovation process – with a wide ideation spout on the left side and a narrow tube on the right, from which successful projects emerge. Once again, there is so much value in killing projects efficiently at each stage-gate of the innovation process and here are a few examples of the expected benefits:

  • re-allocating resources to other, more promising projects,
  • learning from trial and errors and capitalising on best practices across projects,
  • developing a culture of innovation – learning from errors, aiming at success – in order to foster motivation and encourage new daring ideas,
  • simplifying project portfolio management,
  • reducing overlap if not competition between projects.

Innovation processes are becoming more and more collaborative with the help of enterprise 2.0 platforms supporting ideas and project management. Thus it ensues that sharing thoughts about innovations that should not be accepted and projects that should be stopped is an absolute must-have. Once again, let us emphasise the fact that the proper number of resources should be allocated to the screening of projects and that pruning weak ideas should be an area of focus.

Both the rejection and even the killing of bad ideas/innovations can actually deliver benefits from a competitive edge viewpoint. Are you – and your company – ready to reap those benefits and image improvement from saying NO and for killing more innovations?

Bluenove is a consulting firm specialized in Open & Collaborative Innovation

Add to FacebookAdd to DiggAdd to Del.icio.usAdd to StumbleuponAdd to RedditAdd to BlinklistAdd to TwitterAdd to TechnoratiAdd to Yahoo BuzzAdd to Newsvine