- 9 of 10 executives report economic crisis negatively impacts their ability to innovate
- Singapore ranks 2nd in terms of optimism about the power of innovation to improve lives
- Innovation and Growth Inextricably Linked
- 71 per cent of Singapore respondents perceive innovation as a key business driver
- Above average satisfaction levels with Innovation Environment - 93per cent cite an improvement over past five years, above the global average of 82per cent
- Japan (36 per cent), France (40 per cent), the UK (32 per cent) and the US (49 per cent) report that their local innovation environment has worsened
Singapore, February 1, 2012 -- GE (NYSE: GE) released the results of its second annual "Global Innovation Barometer", a perception survey of almost 3,000 business executives across 22 countries, that confirms business executives' belief in innovation as the main driver of prosperity, competitiveness and job creation, and also reveal how challenging and uncertain economic and political environments may hinder companies' ability to deliver meaningful innovation. The Barometer was commissioned by GE and conducted by independent research and consulting firm StrategyOne to identify drivers and deterrents of innovation, and to analyze perceptions around innovation opportunities and challenges.
The continued uncertainty of the global economy has had a marked impact on companies' ability to innovate, with nine out of 10 executives globally reporting increased difficulty accessing external funding or a conservative shift in appetite for risk. Specifically, 88 per cent of global respondents saw increased challenges accessing venture capital, private investment and government funding, while 77 per cent reported a reduction or reevaluation of the company's willingness to take risks.
Despite these challenges, Singapore respondents are generally positive, demonstrating a belief in the country's resilience and preparedness in the face of oncoming changes in the global economy. Overall, Singapore respondents are more satisfied than the global average with the allocation of resources and budget in healthcare, jobs, education and the level of support given to research and innovation. Respondents are one of the most positive, reflecting the country's commitment to driving innovation, demonstrated through a number of funding programs and projects.
71 per cent of Singapore respondents perceive innovation as a key business driver in contrast to Australia and the United States (58 per cent), France (49 per cent), Japan (43 per cent), Germany (54 per cent) and South Korea (61 per cent).
In ranking order, the United States, Germany, Japan, China and Korea were perceived as having the best reputations for innovation. Despite Singapore's enthusiasm for innovation and its executives' positive perceptions of the country's efforts towards innovation, Singapore ranked 14th for its global reputation for innovation ahead of other countries in the region, namely Australia, Taiwan and Thailand. Asked to evaluate the country's reputation for innovation 80% of Singapore respondents believed the country is positively perceived on a global scale.
"This year's study confirms a lot of what we've been seeing in the global marketplace, that the uncertainties inherent in today's economic environment are challenging business' ability to innovate," said Stuart L. Dean, Chief Executive Officer of ASEAN for GE Global Growth & Operations. "Singapore's results reflect the country's drive towards innovation, which is growing as a result of strong government support and firm collaborations between the business and the government."
"It is interesting to note, however, that despite such positive responses among local respondents, there is a slight disconnect with the global perception of Singapore as an environment that drives innovation. Singapore represents a strong market for GE and we have been working with local players throughout the years to drive innovations in healthcare and water projects," he added.
Innovation in business: Singapore versus global
72 per cent of Singapore respondents embrace the changing nature of innovation, which is on par with 74 per cent of global respondents. Singapore respondents recognize that innovation needs to be localized to serve specific market needs. This view is supplemented by the Singapore government's continued support for innovation through the funding of research and collaboration programs between local and foreign companies.
Beyond innovation, talent is high on the list of needs from Singaporean businesses. This is in line with global perceptions, with Singaporeans expressing a greater need for both creative people and technical experts. This reflects the country's drive to innovate, with the government allocating approximately S$70million in August 2011 to a new post-graduate program to nurture research, innovation and enterprise talent in the country.
Singapore executives are positive about their country's overall environment for innovation ranked 4th in their satisfaction just behind Israel, UAE and Sweden. 93per cent agree that the environment for innovation has improved over the last five years. This is above the global average of 82 per cent. This view could be a reflection of the Singapore government's recent S$320 million funding for SMEs under the Technology Innovation Program (TIP), which is managed by SPRING Singapore. The funding is aimed at helping as many as 3,500 SMEs to benefit from technology through innovation over the next five years.
82 per cent of Singaporeans believe that SMEs and individuals can be as innovative as large companies. Compared to a global average of 80 per cent. The respondents recognize the importance of partnership and feel creativity and collaboration will drive innovation in the next decade.
Innovation and economic growth
Executives surveyed indicate that innovation and competitiveness are more connected than ever before. By comparing survey results to external economic data, the report also indicates that countries where innovation policies are perceived as more competitive actually delivered more growth than those countries whose policy frameworks are perceived by executives as less competitive.
- 92 per cent of executives said that innovation is the main ingredient for a more competitive national economy, and 86 per cent agreed that innovation is the best way to create jobs in their country.
- 89 per cent of Singapore respondents see innovation as the main ingredient for a more competitive national economy. 87 per cent agreed that innovation is the best way to create jobs in their country.
- 85 per cent of global executives agreed that innovation is probably the best way to create jobs compared to 87 per cent of respondents in Singapore.
- Markets where business is most satisfied with the perceived political and social environment for innovation delivered higher GDP growth (5.19 per cent average) than those markets where business feels anxious or threatened by policies (2.32 per cent average).
- Beyond economic growth, only 70 per cent of global executives believe innovation can successfully improve people's lives. In contrast, 80 per cent of Singapore respondents are of this view ranking it 2nd globally in this regard after UAE.
- Executives in Israel, United Arab Emirates, Sweden and Singapore reported the highest levels of satisfaction with their country's innovation environment, while Japan, Russia, Poland and France reported the lowest satisfaction levels.
- Interestingly, despite Japan's negative view of its own country's innovation policy environment, it was again ranked by global business leaders as the third most innovative in the world, right after the US and Germany, and ahead of China.
The survey also showed that, companies' internal investments in innovation, from research and development budgets, to the pursuit of new products or business models, are particularly at risk when the business community perceives a negative shift or deterioration of government policies that support innovation.
- 71 per cent of the global sample reported an unfavorable change in external policy or government budget priorities as a result of the global financial crisis also reported cuts in their own company's R&D spending.
- While there is a very high level of satisfaction in Singapore with the efficiency and coordination of government support for innovation globally businesses reported the least level of satisfaction (42 per cent).
Companies Embrace New Approach to Innovation
The 2012 study highlights the evolution of the innovation model. Companies are moving beyond the traditional, closed model of innovation and embracing a new paradigm, one that engenders collaboration between several partners, values the creative power of smaller organizations and individuals, and tailors solutions to meet local needs. Business leaders around the world agree that great innovations in the 21st century will be about shared value -- addressing both human needs and the bottom line -- versus delivering profit alone.
- More than ever, 88 per cent of executives agreed that the way companies will innovate in the 21st century is totally different than ever before. This is concurred by 86 per cent of Singapore respondents.
- 77 per cent of global executives acknowledged that individuals and SMEs have the ability to be as innovative as large companies slightly lower than the 82 per cent in Singapore.
- Globally, 73 per cent agreed that innovation will be driven by people's creativity over scientific research. This compares with 70 per cent of Singapore respondents.
However, disconnect surfaced between the importance of partnerships and the need to pursue them in the near term. A "partnership paradox" presented itself in which 86 per cent of global executives believe that partnerships are an important component of the new model of innovation, but only 21 per cent believe finding partners is an immediate priority to innovate more on a day-to-day basis. In Singapore, partnerships are key with 85 per cent agreeing that partnerships are an important component of the new model of innovation
No One-Size-Fits-All Approach
Above all, the Barometer clearly demonstrates that while innovation at the global level continues to move towards an open, more collaborative model, innovation at the local level presents a complex landscape of challenges and opportunities that cannot be addressed in broad strokes, but that must be understood and dealt with at the market level. Not only do the environments change dramatically from country to country, but so do the perceptions of where innovation can be most effective, and who is most likely to drive it.
"Creating an immersive and conducive environment for innovation requires the right blend of internal and external factors that can readily be adapted to meet individual market and customer needs. In this respect, Singapore is moving in the right direction, breeding innovation through a blend of collaborations, nurturing of talent and governmental support," Dean said.
For more information on this study and a detailed report on results, visit: www.GE.com/innovationbarometer
About the Barometer:
The research was commissioned by GE and conducted by StrategyOne between October 15, 2011, and November 15, 2011. Interviews with the 2,800 senior business executives were conducted by telephone across 22 countries. All respondents are directly involved in their company's innovation processes and are VP and above with 30 per cent of those surveyed at the C-suite level. The countries included in the research are Algeria, Australia, Brazil, Canada, China, France, Germany, India, Israel, Japan, Mexico, Poland, Russia, Kingdom of Saudi Arabia, South Africa, South Korea, Singapore, Sweden, Turkey, UAE, UK and USA.
GE (NYSE: GE) works on things that matter. The best people and the best technologies taking on the toughest challenges. Finding solutions in energy, health and home, transportation and finance. Building, powering, moving and curing the world. Not just imagining. Doing. GE works. For more information, visit the company's website at www.ge.com.
About GE in Singapore:
GE's relationship with Singapore dates back to 1969 when the company opened a number of electronics manufacturing plants. These were subsequently followed by an aircraft engine maintenance, overhaul, and repair shop that services clients throughout the Asia Pacific basin.
Today, GE employs over 3000 people in Singapore, working closely with local partners on key infrastructure projects in the energy, transportation, water and health sectors utilizing cutting-edge, clean, efficient technologies as well as commercial financing capability.
Founded in 1999 StrategyOne is an independent research company with offices in New York, Washington, DC, Paris, Abu Dhabi, London, Chicago, Brussels, Atlanta, Dubai, Houston, Rochester, San Francisco, Seattle and Silicon Valley.
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