GE Global Innovation Barometer 2018 Full Report. Edelman Intelligence / 2017

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1 GE Global Innovation Barometer 2018 Full Report Edelman Intelligence /

2 Contents ONE: Introduction to the GE Global Innovation Barometer (GIB) 2018 TWO: Methodology THREE: Key findings FOUR: Deep dive on the findings 2

3 Introduction to the GE GIB

4 The evolution of the GE GIB KEY MEDIA HEADLINES FURTHER THEMES IN THE RESEARCH 2010 pilot A society that allows innovation to flourish, understands that innovation, research and education are linked to one another 2010 What is innovation, what industries drive innovation and what drives innovation generally in 10 executives are shy about moving ahead with innovation in a sinking economy 2012 The impact of the financial crisis, the global innovation environment, future expectations and optimism 2013 Innovation vertigo: anxious over global economic instability, executives are unsure how to move forward with disruptive ideas, products and services 2013 Innovation at a company level, country policy, business collaboration and big data 2014 Most business leaders want to embrace innovation that disrupts markets even if that deals a blow to their established business models 2014 The pace of innovation provides an uncertain future. The state of innovation, partnership, models, policy and people 2016 A belief in the transformative power of innovation persists; however there is enormous pressure put on businesses to disrupt themselves and the marketplace in today s increasingly competitive business environment 2016 The innovation optimists. Innovation at a company and country level, human capital and start ups 4

5 Methodology 5

6 This year s method and scope Innovation Business Executives 2,090 Business Executives All respondents line of work involves taking part in their company s innovation process/policies. They are responsible for making decisions related to innovation, product development or research and development (R&D) activities in their company. 20 countries: Brazil (150), Canada (100), China (150), France (100), Germany (100), India (150), Indonesia (80), Japan (100), Malaysia (80), Mexico (100), Nigeria (80), Poland (80), Saudi Arabia (80), South Africa (100), South Korea (100), Sweden (80), Turkey (80), UAE (80), UK (150), USA (150). 6

7 Key Findings From Chaos to Confidence: Emerging Players, Emerging Technologies, Emerging Challenges Edelman Intelligence / general electric 7

8 2018 Key Findings From Chaos to Confidence: Emerging Players, Emerging Technologies, Emerging Challenges 1 2 New Actors Driving Innovation: Globally, business executives see multinationals leading innovation (+4 since 2014) while small and medium enterprises (-11 since 2014) and entrepreneurs (-2 since 2014) have lost some of their innovation drive. In the Middle East and Asia especially, the private sector is becoming a more important driver of innovation while there is a decrease in governments driving innovation. Emerging Confidence: While the United States (-8) and Germany (-7) see a drop in championship status from 2014, Japan (+8) and China (+4) take more share. Asia (34+ since 2014) and emerging markets are gaining confidence, viewing themselves as more innovative than they did in Working in a Protectionist World: Global executives want the best of both worlds: on one hand they want the benefits of protectionist policies on domestic businesses and jobs, and on the other hand, they want the benefits of globalization and open markets. A small majority of global executives (55%) believe protectionist policies benefit businesses within their country and 73% believe it is good for the workforce. However, 68% globally believe their government cannot keep up with the pace of change and 22% (of those that prefer protectionism) see multinationals as the drivers of innovation.

9 2018 Key Findings From Chaos to Confidence: Emerging Players, Emerging Technologies, Emerging Challenges The Potential of Additive: Global executives are excited about the potential of 3D printing, saying it will have a positive impact (63%), increase creativity (91%) and get goods to market faster (89%). At the same time, 53% believe 3D printing has yet to reach its full potential, requiring more education and reassurance. Maximizing the Return on Innovation: Globally, 40% of innovations are having a positive impact on the bottom line. What s the secret to success for these innovation achievers? They re taking a more measured approach. Businesses are waiting to perfect and test their innovation before launch rather than getting to market quickly a 10-point jump since 2016 (now 65%). Innovation achievers also are more willing to wait for long-term ROI for breakthrough innovation (84%) and have a clear structure and process in place to measure that return (50% vs. 43%). Hype vs Reality of Impact: Hype around certain technologies does not always equate to transformative impact. In fact, global executives believe that many under-hyped technologies will have a transformative impact, including energy grids (74% say it will bring transformative change to their country), virtual healthcare (68%) and smart cities (71%). 7 8 Future of Work: The workforce is considered the most crucial element to innovation success in most markets, yet skills gaps continue to be a top concern among businesses. Nearly 3 in 4 (74%) global executives believe a lack of skills is an issue facing their industry a challenge that has increased over time (64% say a lack of talent/inadequate skills is a key challenge today, up from 56% in 2014). More Challenging Environment: The challenges confronting innovative businesses are tough and getting tougher both externally and internally. There is a 13-point increase (now 67%) since 2014 in lack of sufficient funding, a 6-point increase (now 65%) in the inability to scale innovations to a wider market, an 8- point increase (now 64%) in lack of adequate talent/ skillsets, and a 14-point increase (now 64%) in the inability of businesses to take risks. Emerging markets such as Poland, South Africa, Malaysia and Saudi Arabia are experiencing the greatest increase in challenges.

10 Deep dive on the Section One: Emerging Players New Actors Driving Innovation Emerging Confidence Working in a Protectionist World Section Two: Emerging Technologies The Potential of Additive Maximizing the Return on Innovation (ROI) Hype vs. Reality of Impact Section Three: Emerging Challenges Future of Work More Challenging Environment findings Edelman Intelligence /

11 section one: Emerging Players Edelman Intelligence /

12 New Actors Driving Innovation Executive Summary Globally, business executives see multinationals leading innovation (+4 since 2014) while small and medium enterprises (-11 since 2014) and entrepreneurs (-2 since 2014) have lost some of their innovation drive. In the Middle East and Asia especially, the private sector is becoming a more important driver of innovation while there is a decrease in governments driving innovation. Edelman Intelligence / general electric 12

13 Since 2014 there has been a shift from small businesses and entrepreneurs driving innovation towards large enterprises and multinationals. Who is the main driver for innovation in your country? (Historical tracking data at a global level) 22% 23% % 19% 18% 18% 11% 14% 11% 12% 9% 9% 3% 2% 1% 5% Small and medium companies (10 to 250 employees) Individual entrepreneurs and start-ups Multinational companies investing in your country Large enterprises (more than 250 employees) headquartered in your country Universities and research labs Government and public authorities at national level Public authorities at local level (region / city) State owned enterprises in your country (SoE) Q3. Who do you think is driving innovation the most today in your country? Base business executives 2014: 3,309, business executives 2018: 2,090 13

14 Multinationals growing reputation as the driver of innovation is seen across the majority of countries. Emerging economies, notably Turkey and South Africa have seen the largest rise in business executives believing multinationals are the main driver of innovation in their country. Multinationals are the main driver for innovation in your country (Historical tracking data at a global level) Ranked by largest increase from 2014 to % 17% 16% 29% 30% 23% 20% 27% 8% 15% 30% 36% 25% 30% 12% 12% 7% 7% 22% 26% 14% 12% 29% 27% 19% 20% 16% 17% 17% 16% 13% 11% % 32% 33% 31% 26% 21% 19% 13% Increase Q3. Who do you think is driving innovation the most today in your country? Base business executives 2014: 3,309, business executives 2018: 2,090 [Full base sizes listed in the appendix] 14 Decrease

15 SMEs are losing their reputation as a driver of innovation in developed economies particularly in Europe. SMEs are the main driver for innovation in your country (Historical tracking data at a global level) Ranked by largest decrease from 2014 to % 37% 35% 36% 18% 23% 9% 10% 29% 27% 10% 8% 4% 1% 6% 7% 3% 1% 14% 6% 22% 13% 14% 5% 20% 24% 10% 12% 30% 15% 24% 8% 30% 13% 20% 26% 7% 11% 9% 18% Increase Decrease Q3. Who do you think is driving innovation the most today in your country? Base business executives 2014: 3,309, business executives 2018: 2,090 [Full base sizes listed in the appendix] 15

16 Europe has experienced a significant decrease in SMEs and entrepreneurs driving innovation. (Historical tracking SMEs) 49% 36% 35% 18% 9% 11% % 20% (Historical tracking Individual entrepreneurs and start-ups) 28% 19% 20% 18% 14% 12% 13% 8% Germany UK Sweden France Poland Sweden UK Germany Germany and the UK have seen an increase in large companies driving innovation (Historical tracking large companies headquartered in your country) 19% 37% 10% 22% Germany UK Q3. Who do you think is driving innovation the most today in your country? Base business executives 2014: 3,309, business executives 2018: 2,090 16

17 In emerging economies, governments are now not seen to be driving innovation as much as they were in Governments are the main driver for innovation in your country (Historical tracking data at a global level) Ranked by growth 21% 33% % 23% 24% 25% % 12% 11% 9% Malaysia UAE China Turkey Saudi Arabia Decrease Q3. Who do you think is driving innovation the most today in your country? Base Base business executives 2014: 3,309, business executives 2018: 2,090 [Full base sizes listed 17 in the appendix]

18 In parallel, in some economies where government traditionally dominated innovation, such as Turkey and South Africa, business executives now see increasing value driven by the private sector. Multinationals are the main driver for innovation in your country (Historical tracking data at a global level) Ranked by growth % 17% 16% % 30% 23% 20% 27% 8% +7 15% 30% +6 36% % +5 30% Turkey South Africa Indonesia Poland France Nigeria Mexico Increase Q3. Who do you think is driving innovation the most today in your country? Base Base business executives 2014: 3,309, business executives 2018: 2,090 [Full base sizes listed in the appendix] 18

19 Emerging Confidence Executive Summary With the United States (-8) and Germany (-7) see a drop in championship status from 2014, Japan (+8) and China (+4) take more share. Asia (34+ since 2014) and emerging markets are gaining confidence, viewing themselves as more innovative than they did in Edelman Intelligence / general electric 19

20 Over time, we see the US and Germany losing their share of championship status to Japan and China What is the country that you consider to be the leading innovation champion? Ranked by 2018 data 38% 36% 33% % 21% 13% 12% 17% 14% 13% 10% 10% 15% 16% 10% 9% 3% 4% 4% 4% 3% 3% 3% 4% 2% 3% 2% 3% 3% 1% 1% 2% 2% 3% 1% 0% 1% 1% 1% 2% USA Japan China Germany Sweden South Korea UK Canada India UAE Q1. What is THE country that you consider to be the leading innovation champion? Base business executives 2013: 3,100, business executives 2014: 3,309, business executives 2016: 2,748, business executives 2018: 2,090 [Full base sizes listed in the appendix] 20

21 Only five countries are seen to have a very strong innovation conducive environment with the Innovation Champions leading the way For each of the following markets, how far would you say that they have developed as an innovation conducive environment? Percentage that have a strong innovation conducive environment (top 3 box) 76% 73% 65% 59% 53% 49% 46% 45% 45% 45% 43% 40% 36% 35% 34% 34% 31% 28% 27% 25% 24% 23% 20% 20% 20% 19% 18% 16% 13% 11% 10% 10% Q2. For each of the following markets, how far would you say that they have developed an Innovation conducive environment? [Top 3 Box 8-10] Base business executives: 2,090, Brazil: 150, Canada: 100, China: 150, France: 100, Germany: 100, India: 150, Indonesia: 80, Japan: 100, Malaysia: 80, Mexico: 100, Nigeria: 80, Poland: 80, Saudi Arabia: 80, South Africa: 100, South Korea: 100, Sweden: 80, Turkey: 80, UAE: 80, UK: 150, USA:

22 Emerging markets have seen the largest increase in how their ability to foster innovation is viewed For each of the following markets, how far would you say that they have developed as an innovation conducive environment? Percentage increase from 2014 to 2018 Russia 18% Australia 16% UAE 16% Saudi Arabia 16% Ireland 15% Poland 15% Italy 14% Mexico 13% France 13% Malaysia 13% Netherlands 12% Indonesia 12% Canada 11% Turkey 11% Singapore 11% China 10% Algeria 9% Switzerland 9% Vietnam 9% Kenya 9% Sweden 9% Nigeria 9% UK 9% Brazil 7% South Africa 7% South Korea 5% Japan 5% Finland 3% India 1% USA 0% Israel -1% Germany -5% Q2. For each of the following markets, how far would you say that they have developed an Innovation conducive environment? [Top 3 Box 8-10] Base business executives 2018: 2,090, business executives 2014: 3,309 [Full base sizes listed in the appendix] 22

23 Business executives report increased satisfaction about their country s ability to foster innovation For your own market, how far would you say that you have developed as an innovation conducive environment? Percentage that feel they have a strong innovation conducive environment (top 3 box) 24% 73% 28% 67% 14% 43% 7% 35% 32% 58% 23% 49% 18% 44% 7% 30% % 44% China India Brazil Malaysia Canada Mexico Indonesia Poland Turkey 61% 61% 40% 40% 36% 56% 30% 48% 11% 28% 72% 85% 59% 53% 24% 20% 26% 27% 7% 8% 41% 38% 77% 65% UAE UK France Global Total Saudi Arabia USA Sweden South Africa South Korea Nigeria Japan Germany Q2. For each of the following markets, how far would you say that they have developed an Innovation conducive environment? [Top 3 Box 8-10] Base business executives 2014: 3,309, business executives 2018: 2,090 23

24 Asian markets have seen the biggest increase in the way they evaluate how innovation conducive their country is For your own market, how far would you say that you have developed as an innovation conducive environment? Percentage that have a strong innovation conducive environment (top 3 box) 49% 39% Top 5 increases 2014 to % 28% 26% On average Asian countries see a 34 percentage point increase in how they evaluate their ability to foster innovation China India Brazil Malaysia Indonesia Q2. For each of the following markets, how far would you say that they have developed an Innovation conducive environment? [Top 3 Box 8-10] Base business executives 2014: 3,309, business executives 2018: 2,090 24

25 Innovation influence becomes multipolar; China and Japan become aspirational Asia & the US An aspirational relationship Asia looks to the USA, with 34% of business executives viewing them as the innovation champion (64% in China). The US A confident view The US believes the US is the innovation champion (61%). LATAM to Japan A relationship of trade and investment 33% of business executives in LATAM believe Japan is the innovation champion, and with Japan investing heavily in the region this relationship aligns. North America (Inward Looking) LATAM Europe (Inward Looking) Africa Europe A self-serving relationship Europe sees countries within the continent as being key innovation champions (Germany 12%, Sweden 10%, UK 6%). However 22% of business executives in Europe look to the US as champions and 19% of executives look to Japan. Asia Africa to China A relationship of trade and investment 41% of business leaders in Africa see China as the innovation champion. Chinese companies are investing in Africa and it is now the country s biggest economic partner. Q1. What is THE country that you consider to be the leading innovation champion? Base business executives: 2,090, Brazil: 150, Canada: 100, China: 150, France: 100, Germany: 100, India: 150, Indonesia: 80, Japan: 100, Malaysia: 80, Mexico: 100, Nigeria: 80, Poland: 80, Saudi Arabia: 80, South Africa: 100, South Korea: 100, Sweden: 80, Turkey: 80, UAE: 80, UK: 150, USA: 150 Base business executives: 2,090 25

26 Global Evaluation of innovation conducive environments /10 Countries see themselves as being more innovation conducive than they are perceived by others 1 Global Evaluation /10 The exceptions to this are countries like Japan and South Korea that are thought to be more innovation conducive by others than themselves. Countries that view themselves more negatively than other countries do (under confident) Japan South Korea France Germany UK Canada Sweden China USA 0 Nigeria South Africa Poland Saudi Arabia Brazil Turkey Self-evaluation of innovation conducive environments /10 Countries that view themselves more positively than other countries do (overly confident) Self-evaluation / Malaysia UAE Indonesia Mexico India Q2. For each of the following markets, how far would you say that they have developed an Innovation conducive environment? [Top 4 Box 7-10] Base business executives: 2,090, Brazil: 150, Canada: 100, China: 150, France: 100, Germany: 100, India: 150, Indonesia: 80, Japan: 100, Malaysia: 80, Mexico: 100, Nigeria: 80, Poland: 80, Saudi Arabia: 80, South Africa: 100, South Korea: 100, Sweden: 80, Turkey: 80, UAE: 80, UK: 150, USA:

27 % of innovation conducive environment (Q2) The top five innovation conducive countries have the five largest GDPs 80% 70% Japan Innovation Champions USA 60% Canada UK 50% Switzerland Sweden Singapore France 40% South Korea Australia Italy 30% UAE Russia India Saudi Arabia 20% Brazil Mexico 10% Nigeria Germany China 0% $0 $5,000,000,000,000 $10,000,000,000,000 $15,000,000,000,000 $20,000,000,000,000 GDP (Gross Domestic Product $) Q2. For each of the following markets, how far would you say that they have developed an Innovation conducive environment? [Top 3 Box 8-10] Base business executives: 2,090, Brazil: 150, Canada: 100, China: 150, France: 100, Germany: 100, India: 150, Indonesia: 80, Japan: 100, Malaysia: 80, Mexico: 100, Nigeria: 80, Poland: 80, Saudi Arabia: 80, South Africa: 100, South Korea: 100, Sweden: 80, Turkey: 80, UAE: 80, UK: 150, USA: 150 // GDP from the World Bank 27

28 % of innovation conducive environment (Q2) Singapore, Switzerland and Sweden are outliers when comparing their lower GDPs to their higher innovation conducive status 60% 50% Singapore, Switzerland and Sweden are innovation conducive outliers when compared with GDP Singapore Switzerland Sweden Canada South Korea These countries fall short of achieving on innovation status in comparison to their GDP France 40% 30% 20% Kenya Malaysia Ireland Finland UAE Israel South Africa Poland Saudi Arabia The Netherlands Turkey Indonesia Mexico Australia Russia Brazil Italy India 10% Vietnam Nigeria Algeria 0% $0.00 $500,000,000, $1,000,000,000, $1,500,000,000, $2,000,000,000, $2,500,000,000, $3,000,000,000, GDP (Gross Domestic Product $) Q2. For each of the following markets, how far would you say that they have developed an Innovation conducive environment? [Top 3 Box 8-10] Base business executives: 2,090, Brazil: 150, Canada: 100, China: 150, France: 100, Germany: 100, India: 150, Indonesia: 80, Japan: 100, Malaysia: 80, Mexico: 100, Nigeria: 80, Poland: 80, Saudi Arabia: 80, South Africa: 100, South Korea: 100, Sweden: 80, Turkey: 80, UAE: 80, UK: 150, USA: 150 // GDP from the World Bank 28

29 Working in a Protectionist World Executive Summary Global executives want the best of both worlds: on one hand they want the benefits of protectionist policies on domestic businesses and jobs, and on the other hand, they want the benefits of globalization and open markets. A small majority of global executives (55%) believe protectionist policies benefit businesses within their country and 73% believe it is good for the workforce. However, 68% globally believe their government cannot keep up with the pace of change and 22% (of those that prefer protectionism) see multinationals as the drivers of innovation. Edelman Intelligence / general electric 29

30 Globally, a small majority of business executives think that protectionist policies towards innovation would benefit the business sector 55% of business executives think that if the government had protectionist policies towards innovation it would benefit the business sector. 45% 55% Pro-protectionism Anti-protectionism Q6. There have recently been discussions about the potential impact of protectionist politics and policy on innovation and businesses. Out of the statements below related to protectionism, which do you agree with the most? Base business executives: 2,090 30

31 The majority of business leaders believe a political protectionist stance on innovation would be beneficial to business at a national level If the government had a political protectionist stance on innovation in my country it would be beneficial to businesses 71% 65% 63% 63% 63% 61% 60% 58% 57% 56% 56% 55% Only 4 countries had a majority that felt a protectionist stance to innovation would not be beneficial to business 53% 53% 51% 51% 51% 49% 47% 43% 39% UAE Sweden India France Saudi Arabia Indonesia Malaysia UK Mexico Turkey Canada Global Average Japan USA Nigeria Brazil China Germany South Korea Poland South Africa Q6. There have recently been discussions about the potential impact of protectionist politics and policy on innovation and businesses. Out of the statements below related to protectionism, which do you agree with the most? Base business executives: 2,090, Brazil: 150, Canada: 100, China: 150, France: 100, Germany: 100, India: 150, Indonesia: 80, Japan: 100, Malaysia: 80, Mexico: 100, Nigeria: 80, Poland: 80, Saudi Arabia: 80, South Africa: 100, South Korea: 100, Sweden: 80, Turkey: 80, UAE: 80, UK: 150, USA:

32 The majority of business executives agree that regulations around privacy and data are stifling innovation Regulations around privacy and data protection are preventing businesses from adopting more radical/transformative innovations 2% Don t know Pro-protectionism 28% Disagree 2% Don t know 70% Agree 29% Disagree Anti-protectionism 69% Agree Disagree 30% 2% Don t know 68% Agree Q5. How much do you agree or disagree with the following statements? Regulations around privacy and data protection are preventing businesses from adopting more radical / transformative innovations. Base business executives: 2,090, Pro-protectionism: 1,153, Anti-protectionism:

33 2016 data not available And business leaders feel regulations around privacy and data protection are stifling innovation more so than two years ago Regulations around privacy and data protection are preventing businesses from adopting more radical / transformative innovations NET: Agree 85% 80% 79% 76% 77% 75% 73% 73% 74% 74% 75% 75% 73% 70% 69% 69% 70% 71% 72% 69% 67% 65% 65% 66% 65% 66% 63% 60% 60% 61% 61% 61% 61% 60% 55% 55% 49% % 69% 65% 56% Increase Decrease Q5. How much do you agree or disagree with the following statements? Base business executives 2016: 2,748, business executives 2017: 2,090 [Full base sizes listed in the appendix]

34 The private sector is seen as driving innovation as governments can t cope with the pace of innovation In my country, the government is not able to regulate innovation as the system cannot keep up with the pace of innovation 2% Don t know Pro-protectionism 34% Disagree 2% Don t know 64% Agree 31% Disagree Anti-protectionism 68% Agree 26% Disagree 2% Don t know 72% Agree Q5.4 How much do you agree or disagree with the following statements? In my country the government is not able to regulate innovation as the system cannot keep up with the pace of innovation. Base business executives: 2,090, Pro-protectionism: 1,153, Anti-protectionism:

35 The majority of business executives across 20 markets feel that the government cannot keep up with the pace of innovation In my country the government is not able to regulate innovation as the system cannot keep up with the pace of innovation. 91% 86% 80% 78% 77% 76% 74% 71% 71% 68% 68% 67% 66% 66% 65% 59% 55% 55% 55% 51% 41% Brazil Mexico South Korea Poland Japan UK Nigeria France South Africa Global Average Turkey Germany Sweden USA India Indonesia China Malaysia Saudi Arabia Canada UAE Q5. How much do you agree or disagree with the following statements? Q5_D. In my country the government is not able to regulate innovation as the system cannot keep up with the pace of innovation. Base business executives: 2,090, Brazil: 150, Canada: 100, China: 150, France: 100, Germany: 100, India: 150, Indonesia: 80, Japan: 100, Malaysia: 80, Mexico: 100, Nigeria: 80, Poland: 80, Saudi Arabia: 80, South Africa: 100, South Korea: 100, Sweden: 80, Turkey: 80, UAE: 80, UK: 150, USA:

36 And this opinion remains consistent across pro or antiprotectionist business executives In my country the government is not able to regulate innovation as the system cannot keep up with the pace of innovation: (NET AGREE) % 91% 88% 84% 81% 83% 79% 71% 79% 75% 79% 76% 71% 72% 73% 74% 72% 70% 67% 64% 58% 80% 69% 65% 69% 61% 67% 65% 61% Difference in pro-protectionism / anti-protectionism results 73% 53% 68% Pro Protectionsism 46% 65% 42% 75% Anti Protectionism 57% 57% 54% 46% 39% 48% Brazil Mexico South Korea Poland Japan UK Nigeria France South Africa Global average Turkey Germany Sweden USA India Indonesia China Malaysia Saudi Arabia Canada UAE Q5. How much do you agree or disagree with the following statements? Q5D. In my country the government is not able to regulate innovation as the system cannot keep up with the pace of innovation. Base business executives: 2,090, Brazil: 150, Canada: 100, China: 150, France: 100, Germany: 100, India: 150, Indonesia: 80, Japan: 100, Malaysia: 80, Mexico: 100, Nigeria: 80, Poland: 80, Saudi Arabia: 80, South Africa: 100, South Korea: 100, Sweden: 80, Turkey: 80, UAE: 80, UK: 150, USA: 150 [Pro-protectionism / Antiprotectionism base sizes too small for media]

37 Businesses are not just seen as the actors currently driving innovation, but also as the actors that should drive innovation Almost 9 in 10 business executives think that Pro-protectionism businesses rather than governments should be the main drivers of the innovation agenda in their countries 85% 13 % 86% 12 % Anti-protectionism Business Government Business Government 87% 11 % Business Government Q.5C How much do you agree or disagree with the following statements? Business should be the main driver of the innovation agenda, not governments. Base business executives: 2,090, Pro-protectionism: 1,153, Anti-protectionism:

38 There are multiple reasons why protectionism would have a benefit on businesses, but key drivers are workforce and giving businesses a competitive edge Why do you think protectionism would have a beneficial effect on businesses in your country? It gives domestic businesses a competitive edge (NET) 86% It is positive for jobs and the workforce (NET) 73% It fosters ideas domestically (NET) 60% It provides government control (NET) 35% NEW = = ENTRANTS = Q7. Out of the reasons below, why do you think protectionism would have a beneficial effect on businesses in your country? Base business executives who are proprotectionism: 1,153 38

39 The negatives of protectionism are also multifaceted with barriers to creativity and to investment being key Why do you think protectionism would have a negative effect on businesses in your country? It gives government too much control (NET) 74% It creates barriers to investment (NET) 69% It reduces competitiveness (NET) 63% It hinders ideation (NET) 59% It reduces our ability to attract talent from foreign countries (NET) = = NEW 35% ENTRANTS Q8. Out of the reasons below, why do you think protectionism would have a negative effect on businesses in your country? Base business executives who are antiprotectionism:

40 Generally, pro-protectionist respondents think more positively about the state of innovation than anti-protectionist business executives Pro-protectionism respondents: The optimists Anti-protectionism respondents: The realists More likely to say they have a clear innovation strategy See more countries as innovation conducive environments Think that the government is not able to regulate innovation effectively See business as the main driver and funder for innovation See the government and national bodies as the main drivers and funders for innovation See more innovations creating hype and having transformative potential Think to a lesser degree that they have a clear innovation strategy See less countries as innovation conducive environments Think they perform well against innovation success criteria 40

41 Protectionism attitudes impact business executives perceptions of innovation Edelman Intelligence /

42 Depending on the stance towards protectionism, business executives select different stakeholders as the main driver for innovation Those who favor protectionism are more likely to feel that state-owned enterprises are driving innovation. However, those who are anti-protectionism are more likely to see individual entrepreneurs/ start-ups and SMEs as driving innovation. 22% 22% 17% 18% 21% Pro Protectionsism Anti Protectionism 14% 13% 10% 10% 9% 12% 6% 6% 6% 3% 5% 2% 2% Multinational companies Large enterprises Individual entrepreneurs/ start-ups Universities and research labs Government at a national level SME's State owned enterprises International organisations Public authorities at a local level Q3. Who do you think is driving innovation the most today in your country? Base business executives who are pro-protectionism: 1,153, business executives who are anti-protectionism:

43 Similarly, this is reflected in who business executives believe is funding innovation in their country Those who favor anti-protectionism are more likely to feel multinational companies and individual entrepreneurs/ start-ups are funding innovation in their country. 24% 28% Pro Protectionsism Anti Protectionism 17% 17% 16% 14% 12% 17% 8% 7% 6% 5% 6% 5% 5% 5% 4% 3% Multinational companies Large enterprises Government at a national level Individual entrepreneurs/ start-ups State owned enterprises International organisations Universities and research labs SME's Public authorities at a local level Q4. Who do you think is funding innovation the most today in your country? Base business executives who are pro-protectionism: 1,153, business executives who are anti-protectionism:

44 section two: Emerging Technologies Edelman Intelligence /

45 The Potential of Additive Executive Summary Global executives are excited about the potential of 3D printing, saying it will have a positive impact (63%), increase creativity (91%) and get goods to market faster (89%). At the same time, 53% believe 3D printing has yet to reach its full potential, requiring more education and reassurance. Edelman Intelligence / general electric 45

46 The majority of business executives believe 3D printing s impact will be mostly positive for businesses in their country I think 3D printing will have a positive impact on businesses in my country 4% 3% I think 3D printing will have both a positive and negative impact on businesses in my country 31% I think 3D printing will have a negative impact on businesses in my country 63% Don't know Q13. We would now like to ask you about 3D (3-dimensional) printing and the impact you think this might have on businesses in your country. Do you think 3D (3- dimensional) printing is beneficial or could have a negative impact on businesses? Base Business Executives: 2,090 46

47 Benefits include increased creativity, speed to market, lower costs, competitive advantage and improved CO2 footprint Allow businesses to be more creative in the products and goods they can create 91% Enable goods to get to market faster 89% Reduce the costs of goods making them more affordable 83% Businesses that invest in 3D printing will leave other businesses behind 81% Beneficial for the environment and reduce CO2 in manufacturing 80% = Q14. Imagine 3D printing has become a reality in your country with business and industries adopting it. How far do you agree or disagree with the following statements? Base Business Executives: 2,090 47

48 Benefits of 3D printing do vary at a country level Turkey (96%), Brazil (95%), India (90%) Saudi Arabia (94%), China (91%), Malaysia (89%), Turkey (89%) Indonesia (95%), China (93%), Malaysia (93%), Brazil (89%), India (89%) Reduce the costs of goods making them more affordable (83%) Businesses that invest in 3D printing will leave other businesses behind (81%) Beneficial for the environment and reduce CO2 in manufacturing (80%) South Africa (73%), Sweden (70%) Germany (72%), Sweden (71%), Indonesia (71%), Canada (69%) Germany (68%), South Korea (67%), Japan (66%) Q14. Imagine 3D printing has become a reality in your country with business and industries adopting it. How far do you agree or disagree with the following statements? [Net: Agree] Base business executives: 2,090, Brazil: 150, Canada: 100, China: 150, France: 100, Germany: 100, India: 150, Indonesia: 80, Japan: 100, Malaysia: 80, Mexico: 100, Nigeria: 80, Poland: 80, Saudi Arabia: 80, South Africa: 100, South Korea: 100, Sweden: 80, Turkey: 80, UAE: 80, UK: 150, USA:

49 Only 4 in 10 business executives are very familiar with 3D printing With only 4 in 10 business executives being very familiar with 3D printing, there is work to be done to encourage the majority of business executives to become more familiar and therefore adopt 3D printing. No, I am not familiar with 3D printing (6%) Don t know (1%) Yes, but I am only somewhat familiar with 3D printing (52%) 41% Are very familiar with 3D printing Yes, I am very familiar with 3D printing (41%) Q11. Are you familiar with 3D (3-dimensional) printing and what it is? Base Business Executives: 2,090 49

50 However, a majority of business executives believe 3D printing has yet to realize its full potential. 53% say 3D printing hasn t reached its full potential yet 14% 27% 32% 21% 5% 3D printing has already had an impact on businesses 3D printing has become a reality that is impacting businesses 3D printing is starting to become a reality but won't impact businesses for several years Q12. How mature would you say the 3D (3-dimensional) printing industry is in your country. Base Business Executives: 2,090 3D printing is talked about, but isn't a reality yet 3D printing isn't being talked about 50

51 27% 29% 33% 34% 31% 31% 34% 31% 41% 41% 37% 34% 41% 40% 61% 60% 58% 57% 55% 54% 54% 53% 52% 44% 42% 52% 50% 46% 50% 49% 48% 46% 48% 45% 44% 48% 55% 53% 61% 69% 68% 66% Outside of larger countries with strong manufacturing industries, most do not believe 3D printing has made an impact yet in their country How mature would you say the 3D (3-dimensional) printing industry is in your country? India stands out as a key market where business executives state that 3D printing is having a much greater impact than it is being talked about. Being talked about Having an impact South Africa South Korea Poland Indonesia Saudi Arabia Canada Brazil Japan Turkey UK Global Total Germany France Malaysia Nigeria Mexico UAE China Sweden USA India Q12. How mature would you say the 3D (3-dimensional) printing industry is in your country? Base Business Executives: 2,090, Brazil: 150, Canada: 100, China: 150, France: 100, Germany: 100, India: 150, Indonesia: 80, Japan: 100, Malaysia: 80, Mexico: 100, Nigeria: 80, Poland: 80, Saudi Arabia: 80, South Africa: 100, South Korea: 100, Sweden: 80, Turkey: 80, UAE: 80, UK: 150, USA:

52 Globally, the high-tech /IT and manufacturing sectors are most likely to see the impact of 3D printing 3D printing is having an impact in my country Sectors above average Sectors below average 52% 43% 43% 42% 41% 40% 40% 39% 36% 35% 34% High-tech / IT Manufacturing (Other) FMCG Electronics Total Industrial Products Energy related Health related Professional services / Business services Telecoms / Internet Automotive / transport / logistics Q12. How mature would you say the 3D (3-dimensional) printing industry is in your country. Base Business Executives: 2,090 52

53 Innovation Achievers more readily recognize the positive impact of 3D printing in their country 53

54 The positive impact of 3D printing is recognized more by innovation Achievers Innovation Achievers are more likely to see the benefit of 3D printing in their country, with almost 7 in 10 innovation Achievers agreeing to the statement. 3D printing will have a positive impact on business in my country: % 68% Innovation nonachievers Innovation achievers Q13. Do you think 3D (3-dimensional) printing is beneficial or could have a negative impact on businesses? Base business executives 2018: 2,090, innovations winners: 709, innovation losers:

55 Maximizing the Return on Innovation Executive Summary Globally, 40% of innovations are having a positive impact on the bottom line. What s the secret to success for these innovation achievers? They re taking a more measured approach. Businesses are waiting to perfect and test their innovation before launch rather than getting to market quickly a 10-point jump since 2016 (now 65%). Innovation achievers also are more willing to wait for long-term ROI for breakthrough innovation (84%) and have a clear structure and process in place to measure that return (50% vs. 43%). Edelman Intelligence / general electric 55

56 40% of innovations over the last five years have had a positive impact on business s bottom line 60% of innovations over the last five years have not resulted in a positive impact on the bottom line A failure that did not provide any useful learnings for future innovations A failure that provided useful learnings for future innovations 20% 15% 40% A success that positively impacted the bottom line and improved our position in the market 25% A success that improved our position in the market but did not positively impact our bottom line Q23 - Mean(Including Zero) Summary - What percentage of your company s innovations over the past 5 years do you think have fallen into the following categories? Base business executives 2018: 2,090 56

57 22% of business executives have seen up to half of their innovations positively impact their bottom line over the last five years Q23 - Mean(Including Zero) Summary - What percentage of your company s innovations over the past 5 years do you think have fallen into the following categories? Base business executives 2018: 2,090 57

58 However, ROI success varies across the globe with France claiming the highest achievement and Japan claiming the lowest What percentage of your company s innovations over the past 5 years do you think have been a success that positively impacted the bottom line and improved our position in the market? Percentage of ROI that is more than 50 percent Mean scores: Below or above Q23. Mean (Including Zero) Summary - What percentage of your company s innovations over the past 5 years do you think have fallen into the following categories? Base 0-25% 693, 26-49% 688, % 709. [Full base sizes listed in the appendix] 58

59 We dug deeper and looked at The Achievers and Non-Achievers to see what differentiated them Business executives whose average % of their company s innovations have positively impacted their bottom line over the last 5 years The Non-Achievers The Achievers 0-25% 26-49% % Q23 - Mean(Including Zero) Summary - What percentage of your company s innovations over the past 5 years do you think have fallen into the following categories? Base business executives 2018: 2,090. Base 0-25% 693, 26-49% 688, %

60 What makes a business a ROI Achiever? They know how key digitalization is to innovation success They are thinking about long-term strategies Business executives that say % of their company s innovations have positively impacted their bottom line over the last 5 years They focus on measurement They are more cautious in their approach to innovation 60

61 Achievers are using data effectively and integrating digital capabilities into the business model They know how key digitalization is to innovation success Non-Achievers Achievers 88% 86% 84% 78% 78% 77% 54% 37% To harness and use data in effective ways to make informed business decisions (% perform well) To have a data security program in place to mitigate against any risks of losing data, data breaches or being hacked (% perform well) To put digital capability at the core of their business model (% perform well) Digitalization has made it much easier and efficient for us to measure our return on investment (% agree) Q23 Mean (Including Zero) Summary - What percentage of your company s innovations over the past 5 years do you think have fallen into the following categories? Base business executives 2018: 2,090. Base 0-25% 693, 26-49% 688, % 709. Table Q17 How does your company currently perform against these success criteria? Q22 - Which of the below statements represent your attitudes to measuring the return on investment of innovation at your company? Base business executives 2018: 2,090 61

62 They know how key measurement is to innovation success Achievers are more likely to focus on demonstrating the value to investors, clients and users, and measure the successes of their innovations 80% 88% Non-Achievers Achievers 40% 46% 35% 41% To demonstrate the value of their innovations to clients and users (% perform well) We have to measure the impact of innovation on business performance to get further investment and funding (% agree) We have measurement frameworks in place to keep our investors happy (% agree) Q23 Mean (Including Zero) Summary - What percentage of your company s innovations over the past 5 years do you think have fallen into the following categories? Base business executives 2018: 2,090. Base 0-25% 693, 26-49% 688, % 709. Q17 How does your company currently perform against these success criteria? Q22 - Which of the below statements represent your attitudes to measuring the return on investment of innovation at your company? Base business executives 2018: 2,090 62

63 Achievers are more cautious and measured in their approach to innovation They know how key being cautious is to innovation success Non-Achievers Achievers When innovating, it is best 63% 74% When innovating, it is best 58% 72% To protect the core business as much as possible, so it continues to generate the profitability needed to support Research & Innovation efforts (% agree) To wait to perfect and test the innovation before launch, in order to make sure the customer is completely satisfied from the start (% agree) Q23 Mean (Including Zero) Summary - What percentage of your company s innovations over the past 5 years do you think have fallen into the following categories? Base business executives 2018: 2,090. Base 0-25% 693, 26-49% 688, % 709. Q16. On a scale from 1 to 10, how crucial do you think the following elements are for a company to be able to innovate successfully? Q24A - Now we are going to present different views on the ideal innovation process. For each you will be shown two options. We would like you to pick the one you feel is the truest or the most relevant in driving successful innovation. Base business executives 2018: 2,090c 63

64 In 2018, a more cautious approach to innovation is favored globally rather than getting to market quickly When innovating, it is best... (19 markets no UK) To get to market as quickly as possible to keep an edge on competition even if this means having an imperfect product or service and improving it along the way 65% 55% 45% 35% To wait to perfect and test the innovation before launch in order to make sure the customer is completely satisfied from the start Q24. Now we are going to present different views on the ideal innovation process. For each you will be shown two options. We would like you to pick the one you feel is the truest or the most relevant in driving successful innovation. Sometimes you may feel your opinion sits in the middle, but please try to select the one which you believe is the most critical. [Top 3 Box 8-10] Base business executives 2016: 2,748, business executives ,090 64

65 2016 data not available This increased slow and steady approach is happening across most countries When innovating, it is best... To wait to perfect and test the innovation before launch in order to make sure the customer is completely satisfied from the start Ranked by 2016 to 2018 difference % 73% 60% 78% 51% 66% 49% 61% 73% 53% 64% 68% 78% 65% 63% 55% 53% 49% 59% 62% 71% 47% 66% 74% 75% 66% 68% 58% 51% 61% 55% 49% 65% 63% 60% 55% 54% 54% 56% 67% 34% Increase Decrease Q24. For each of the following markets, how far would you say that they have developed an Innovation conducive environment? [Top 3 Box 8-10] Base business executives 2016: 2,748, business executives 2018: 2,090 [Full base sizes listed in the appendix] 65

66 In 2018 it is more important to protect the core business as much as possible and look at the long term impact of innovating When innovating, it is best... (19 markets no UK) +4 To protect the core business as much as possible, so it continues to generate the profitability needed to support Research & Innovation efforts 65% 69% 35% -4 31% To bring innovative products and/or services to market as fast as possible without worrying about the short-term impact it can have on the core business Q24. Now we are going to present different views on the ideal innovation process. For each you will be shown two options. We would like you to pick the one you feel is the truest or the most relevant in driving successful innovation. Sometimes you may feel your opinion sits in the middle, but please try to select the one which you believe is the most critical. [Top 3 Box 8-10] Base business executives 2016: 2,748, business executives ,090 66

67 2016 data not available At a country level, business executives are focusing on protecting their core business as much as possible When innovating, it is best... To protect the core business as much as possible, so it continues to generate the profitability needed to support Research & Innovation efforts Ranked by 2016 to 2018 difference % 85% 56% 72% 64% 78% 52% 64% 62% 72% 75% 66% 66% 57% 69% 65% 72% 89% 77% 80% 76% 79% 68% 66% 65% 63% 61% 60% 72% 70% 76% 73% 65% 65% 63% 59% 55% 58% 55% 49% 67% Increase Decrease Q24. For each of the following markets, how far would you say that they have developed an Innovation conducive environment? [Top 3 Box 8-10] Base business executives 2016: 2,748, business executives 2018: 2,090 [Full base sizes listed in the appendix] 67

68 Achievers are also more prepared to strategically work towards a long-term return on investment They know how key long-term strategy is to innovation success Non-Achievers Achievers 84% 84% 75% 76% 66% 75% To be ready to accept a long-term return on investment to allow for breakthrough innovation (% perform well) To follow the long-term business strategy towards To create innovations that prioritise a long-term societal innovation rather than focus on current innovation trends or environmental benefit (% agree) that have little meaningful impact (% perform well) Q23 Mean (Including Zero) Summary - What percentage of your company s innovations over the past 5 years do you think have fallen into the following categories? Base business executives 2018: 2,090. Base 0-25% 693, 26-49% 688, % 709. Q17 - How does your company currently perform against these success criteria? Q24C - Now we are going to present different views on the ideal innovation process. For each you will be shown two options. We would like you to pick the one you feel is the truest or the most relevant in driving successful innovation. Base business executives 2018: 2,090 68

69 The Achievers are seeing a positive impact on their bottom line as they are more likely to strategize and measure ROI 69

70 Those with a higher rate of ROI success are more likely to have a clear innovation strategy and measure their ROI My company does have a clear innovation strategy (top 3 box) I do measure the contribution of innovation to my business performance (top 3 box) Non-Achievers Achievers 61% Non-Achievers Achievers 42% 43% 59% Q19. Does your company have a clear innovation strategy? Base business executives 2018: 2,090 Q20. Do you measure the contribution of innovation to your business performance? Base business executives 2018: 2,090 Q23 Mean (Including Zero) Summary - What percentage of your company s innovations over the past 5 years do you think have fallen into the following categories? Base 0-25% 693, 26-49% 688, %

71 And the Achievers are measuring their ROI in different ways: a clearer structure of how to report and measuring factors other than profit Having a clear process and structure in place to measure innovation across various parts of the business or have innovation teams report directly to the CEO. Non-Achievers 43% Achievers 50% Measuring factors other than revenue, such as reputation of the company, the outcome of the service, customer adoption rates or impact at a societal level to decide which product or service should be funded or not funded (% agree) Non-Achievers 41% Achievers 50% Q23 Mean (Including Zero) Summary - What percentage of your company s innovations over the past 5 years do you think have fallen into the following categories? Base 0-25% 693, 26-49% 688, % 709 Q21.Thinking more about measuring the contribution of innovation to your business performance, [ONLY SHOW IF 2-10 AT Q20: what do you do to measure this contribution, if anything, and] what do you think you should be doing? Base business executives 2018: 2,090 71

72 When it comes to policy, innovation Achievers are more likely to favor anti-protectionist policies 72

73 Despite a general leaning towards protectionism, innovation Achievers are more likely to favor anti-protectionism policies around innovation Pro-protectionism 59% -8 51% Anti-protectionism +8 Non-Achievers 49% Achievers 41% If the government had a political protectionist stance on innovation in my country it would be beneficial to businesses If the government had a political protectionist stance on innovation in my country it would have a negative impact on businesses Q6. There have recently been discussions about the potential impact of protectionist politics and policy on innovation and businesses. Out of the statements below related to protectionism, which do you agree with the most? Base business executives 2018: 2,090, innovations winners: 709, innovation losers:

74 The key reasons for this are perceived barriers to innovation and too much government control Innovation Achievers are more likely to think that protectionism policies would slow down the pace of innovation due to less foreign investment, and it would give the government too much control significantly more so than innovation losers. Why do you think protectionism would have a negative effect on businesses in your country? Non-Achievers Achievers It is less appealing to foreign investment which would slow down the pace of innovation 38% 53% It gives the government too much control 39% 52% Q8. Out of the reasons below, why do you think protectionism would have a negative effect on businesses in your country? Base business executives 2018: 2,090, innovations winners: 709, innovation losers:

75 Hype vs. Reality of Impact Executive Summary Hype around certain technologies does not always equate to transformative impact. In fact, global executives believe that many under-hyped technologies will have a transformative impact, including energy grids (74% say it will bring transformative change to their country), virtual healthcare (68%) and smart cities (71%). Edelman Intelligence / general electric 75

76 AI, IoT, Fintech and 3D printing are receiving the most hype globally How much hype are they are creating in your country today? (NET hype) 71% 70% 69% 68% 67% 66% 65% 64% 65% average hype 62% 62% 62% 57% Artificial and machine intelligence Internet of Things Financial technology and currency 3D printing Augmented Reality/ Virtual reality Big data and analytics Smart energy grids Nanotechnology Driverless transport Smart cities Electrification of the transport system Virtual healthcare diagnosis Q9.When we talk about innovation hype, we mean hot topics or trends that are being widely discussed but aren t necessarily having an impact yet. Out of the innovations listed below, please rate each based on how much hype they are creating in your country today. Base Business Executives: 2,090 76

77 Yet several other innovations are viewed to be just as transformative and impactful as those receiving the most hype 74% How much impact and transformative change will they bring to your county? (NET impact) 71% 70% 71% 74% 72% 71% 72% 71% average impact 69% 68% 68% 68% Artificial and machine intelligence Internet of Things Financial technology and currency 3D printing Augmented Reality/ Virtual reality Big data and analytics Smart energy grids Nanotechnology Driverless transport Smart cities Electrification of the transport system Virtual healthcare diagnosis Q10. Next, please rate each of these innovations in terms of how much impact and transformative change they will bring to your country. Base Business Executives: 2,090 77

78 The potential impact of smart energy grids, smart cities, electrification of transport and virtual healthcare significantly exceeds their hype How much hype are they are creating in your country today? (NET hype) How much impact and transformative change will they bring to your county? (NET impact) 71% 74% 71% 70% 70% 69% 69% 68% 68% 67% 66% 71% 65% 74% 64% 72% 71% 72% 68% 62% 62% 62% 68% 57% Artificial and machine intelligence Internet of Things Financial technology and currency 3D printing Augmented Reality/ Virtual reality Big data and analytics Smart energy grids Nanotechnology Driverless transport Smart cities Electrification of the transport system Virtual healthcare diagnosis Q9.When we talk about innovation hype, we mean hot topics or trends that are being widely discussed but aren t necessarily having an impact yet. Out of the innovations listed below, please rate each based on how much hype they are creating in your country today. Base Business Executives: 2,090. Q10. Next, please rate each of these innovations in terms of how much impact and transformative change they will bring to your country. Base Business Executives: 2,090 78

79 Looking by country, we see different innovations offering a strong future impact Sweden Canada UK Poland USA France Germany Turkey China South Korea UAE Japan Mexico Saudi Arabia Nigeria India Brazil Malaysia Indonesia South Africa Q10. Next, please rate each of these innovations in terms of how much impact and transformative change they will bring to your country. Base Business Executives: 2,090 79

80 INNOVATION IMPACT There is a job to be done to raise awareness of the importance of smart cities, smart energy grids and electrification of the transport system Less Hype, Stronger Impact More Hype, Stronger Impact Smart cities Smart energy grids Artificial and machine intelligence Electrification of the transport system Virtual healthcare diagnosis Internet of Things Nanotechnology 3D printing Driverless transport Big data and analytics Financial technology and currency Augmented Reality/ Virtual reality Less Hype, Weaker Impact INNOVATION HYPE More Hype, Weaker Impact Q9. When we talk about innovation hype, we mean hot topics or trends that are being widely discussed but aren t necessarily having an impact yet. Out of the innovations listed below, please rate each based on how much hype they are creating in your country today. Base Business Executives: 2,090. Q10. Next, please rate each of these innovations in terms of how much impact and transformative change they will bring to your country. Base Business Executives: 2,090 80

81 There are two innovations that stand out regarding their innovation impact and/or hype potential Artificial Intelligence (AI), defined as the ability of machines and software to harness large amounts of data to do tasks, to make decisions and find solutions, sees itself at the top position throughout the different markets. For both hype and impact, a majority of countries are ranking AI among the highest four innovations in both categories. Hype Impact Hype Impact For Smart Energy Grids, meaning advanced energy infrastructures that distribute energy on a grid system and can integrate renewable energy with non-renewable energy sources, we observe a discrepancy between hype and impact. Although the innovation does not generate a lot of hype, innovation executives expect an impact. Q9.When we talk about innovation hype, we mean hot topics or trends that are being widely discussed but aren t necessarily having an impact yet. Out of the innovations listed below, please rate each based on how much hype they are creating in your country today. Base Business Executives: 2,090 Q10. Next, please rate each of these innovations in terms of how much impact and transformative change they will bring to your country. Base Business Executives: 2,090

82 section three: Emerging Challenges Edelman Intelligence /

83 Future of Work Executive Summary The workforce is considered the most crucial element to innovation success in most markets, yet skills gaps continue to be a top concern among businesses. Nearly 3 in 4 (74%) global executives believe a lack of skills is an issue facing their industry a challenge that has increased over time (64% say a lack of talent/inadequate skills is a key challenge today, up from 56% in 2014). Edelman Intelligence / general electric 83

84 The impact of automation and pace of change have led to a real skills gap 3 in 4 innovation executives believe a lack of skills is an issue their industry is facing There is currently a skills gap in my industry Level of agreement is consistent across sectors (74%) 43% 31% 19% 5% Strongly disagree Somewhat disagree Somewhat agree Strongly agree 2018 Q5B. How much do you agree or disagree with the following statements? There is currently a skills gap in my industry. Base business executives: 2,090 84

85 This challenge only seems to be growing for business executives - finding the right talent and skill sets is apparently restricting business s ability to innovate efficiently NET: A challenge Do you consider the following a key challenge restricting your business s ability to innovate efficiently? A lack of talent / inadequate skill set % 56% 64% +8 ppt Q25.Do you consider any of the following as key challenges to be restricting your business s ability to innovate efficiently? Base business executives 2014: 3,309, business executives 2016: 2,748, business executives 2018: 2,090 85

86 Business executives are increasingly recognizing that robotics and automation will radically transform the job market In the next 10 years, technological developments, such as robotics and automation are going to radically transform the job market and nature of work (19 markets no UK) 59% % 44% 30% 2% 2% 9% 7% Strongly disagree Somewhat disagree Somewhat agree Strongly agree Q5E. How much do you agree or disagree with the following statements? In the next 10 years, technological developments such as robotics and automation are going to radically transform the job market and nature of work. Base business executives 2016: 2,748, business executives ,090 86

87 2016 data not available And the potential effects of a shift to automation has seen the largest increase in emerging markets In the next 10 years, technological developments such as robotics and automation are going to radically transform the job market and nature of work NET: Agree Ranked by 2016 to 2018 difference 96% 94% 93% 81% 81% 75% 86% 91% 99% 88% 95% 86% 93% 91% 96% 86% 91% 77% 82% 84% 88% 90% 87% 91% 89% 89% 87% 92% 93% 90% 91% 84% 76% 76% % 93% 83% 81% 80% 76% 67% Q5. How much do you agree or disagree with the following statements? In the next 10 years, technological developments such as robotics and automation are going to radically transform the job market and nature of work. [NET: Agree Top 2 Box] [Full base sizes listed in the appendix] 87

88 Pro-protectionists place job security and positivity for the workforce as a key benefit of more protectionism in their country Why do you think protectionism would have a beneficial effect on businesses in your country? It gives domestic businesses a competitive edge (NET) 86% It is positive for jobs and the workforce (NET) 73% It fosters ideas domestically (NET) 60% NEW It provides government +2 control = = (NET) % ENTRANTS = Q7. Out of the reasons below, why do you think protectionism would have a beneficial effect on businesses in your country? Base business executives who are proprotectionism: 1,153 88

89 And this extends across regions the workforce is considered the most crucial element to innovation success across most markets Elements most crucial to innovation success for businesses Key: Themes Workforce Data ROI Strategy Q16. On a scale from 1 to 10, how crucial do you think the following elements are for a company to be able to innovate successfully? [Top 3 Box] Base business executives: 2,090, Brazil: 150, Canada: 100, China: 150, France: 100, Germany: 100, India: 150, Indonesia: 80, Japan: 100, Malaysia: 80, Mexico: 100, Nigeria: 80, Poland: 80, Saudi Arabia: 80, South Africa: 100, South Korea: 100, Sweden: 80, Turkey: 80, UAE: 80, UK: 150, USA:

90 More Challenging Environment Executive Summary The challenges confronting innovative businesses are tough and getting tougher both externally and internally. There is a 13-point increase (now 67%) since 2014 in lack of sufficient funding, a 6-point increase (now 65%) in the inability to scale innovations to a wider market, an 8-point increase (now 64%) in lack of adequate talent/ skillsets, and a 14-point increase (now 64%) in the inability of businesses to take risks. Emerging markets, such as Poland, South Africa, Malaysia and Saudi Arabia are experiencing the greatest increase in challenges. Edelman Intelligence / general electric 90

91 Businesses are struggling to scale up, investment is not available, and it is a challenge to convert ideas into action Do you consider any of the following as key challenges to be restricting your business s ability to innovate efficiently? NET: Top 2 / A Challenge 67% % 64% 64% 64% 64% 64% 62% 60% 57% The lack of sufficient investment and financial support The incapacity to scale up successful innovations, to a wider or international market A lack of talent / inadequate skillset The difficulty to define an effective business model to support new ideas and make them profitable The incapacity of the business to take risks The increased pressure to conform to innovation hype and trends around certain innovations The difficulty to come up with radical and disruptive ideas The internal inertia The lack of internal and the incapacity support from the to be nimble, failing leadership team/top at rapidly management converting ideas into actions The overwhelming amount of information Q25.Do you consider any of the following as key challenges to be restricting your business s ability to innovate efficiently? Not a challenge at all (1), not a real challenge (2), a bit of a challenge (3), a critical challenge (4) Base business executives 2018: 2,090 91

92 And these key issues have become even bigger challenges than they were four years ago Do you consider any of the following as key challenges to be restricting your business s ability to innovate efficiently? NET: Top 2 / A Challenge % % 65% 62% 59% 59% 56% 54% 50% % The incapacity of the business to take risks The lack of sufficient investment and financial support The incapacity to scale up successful innovations, to a wider or international market The internal inertia and the incapacity to be nimble, failing at rapidly converting ideas into actions The difficulty to define an effective business model to support new ideas and make them profitable Q25.Do you consider any of the following as key challenges to be restricting your business s ability to innovate efficiently? Not a challenge at all (1), not a real challenge (2), a bit of a challenge (3), a critical challenge (4) Base business executives 2014: 3,309, business executives 2018: 2,090 92

93 Globally, a lack of financial support and the inability to scale up stifle both developed and emerging markets Do you consider any of the following as key challenges to be restricting your business s ability to innovate efficiently? NET: Challenge Top 1 Challenge The majority cite a lack of financial support and the inability to scale up as a challenge to innovation, but for Asia it is a lack of ideas and talent that are the key barriers. NET Challenge (Top 1): The increased pressure to conform to innovation hype and trends around certain innovations The incapacity to scale up successful innovations to a wider or international market The difficulty to come up with radical and disruptive ideas The difficulty to define an effective business model to support new ideas and make them profitable The lack of sufficient investment and financial support A lack of talent / inadequate skillset The overwhelming amount of information The incapacity of the business to take risks Q25.Do you consider any of the following as key challenges to be restricting your business s ability to innovate efficiently? Not a challenge at all (1), not a real challenge (2), a bit of a challenge (3), a critical challenge (4) Base business executives 2018: 2,090 [Full base sizes listed in the appendix] [Of note, The internal inertia and the incapacity to be nimble, failing at rapidly converting ideas into actions not listed as a top 1 NET challenge in any market surveyed] 93

94 Poland, Canada and South Africa are less able to take risks than they were four years ago Do you consider any of the following as key challenges restricting your business s ability to innovate efficiently? NET: Top 2 / A Challenge Above average increase from % +47 Poland +25 Canada +22 South Africa 50% +14 point global average jump from Germany -5 Turkey The incapacity of the business to take risks Below average increase from Q25.Do you consider any of the following as key challenges to be restricting your business s ability to innovate efficiently? Not a challenge at all (1), not a real challenge (2), a bit of a challenge (3), a critical challenge (4) Base business executives 2014: 3,309, business executives 2018: 2,090 [Full base sizes listed in the appendix] 94

95 Emerging economies are more likely to lack sufficient investment and financial support than in 2014 Do you consider any of the following as key challenges to be restricting your business s ability to innovate efficiently? NET: Top 2 / A Challenge Above average increase from % % +27 Malaysia +13 point global average jump from Saudi Arabia +22 South Africa, Brazil +1 Sweden, Turkey -3 Germany The lack of sufficient investment and financial support Below average increase from Q25.Do you consider any of the following as key challenges to be restricting your business s ability to innovate efficiently? Not a challenge at all (1), not a real challenge (2), a bit of a challenge (3), a critical challenge (4) Base business executives 2014: 3,309, business executives 2018: 2,090 [Full base sizes listed in the appendix] 95

96 Scaling up innovations is a growing issue across the markets, but Mexico and Sweden are not experiencing this challenge Do you consider any of the following as key challenges to be restricting your business s ability to innovate efficiently? NET: Top 2 / A Challenge Above average increase from % +6 65% +27 Poland +22 Malaysia +20 China +18 Canada +17 France +6 point global average jump from The incapacity to scale up successful innovations, to a wider or international market -16 Mexico Below average increase from Sweden Q25.Do you consider any of the following as key challenges to be restricting your business s ability to innovate efficiently? Not a challenge at all (1), not a real challenge (2), a bit of a challenge (3), a critical challenge (4) Base business executives 2014: 3,309, business executives 2018: 2,090 [Full base sizes listed in the appendix] 96

97 Poland and Asian markets increasingly struggle with inertia, but Mexico and Sweden don t face this issue as much as in 2014 Do you consider any of the following as key challenges to be restricting your business s ability to innovate efficiently? NET: Top 2 / A Challenge % +6 62% The internal inertia and the incapacity to be nimble, failing at rapidly converting ideas into actions Above average increase from Poland +6 point global average jump from Mexico +22 Indonesia Below average increase from South Korea, Saudi Arabia -14 Sweden Mexico and Sweden also score lower this year for the incapacity to scale up successful innovations, to a wider or international market. Does this mean that the ability to scale up has helped them combat inertia? Q25.Do you consider any of the following as key challenges to be restricting your business s ability to innovate efficiently? Not a challenge at all (1), not a real challenge (2), a bit of a challenge (3), a critical challenge (4) Base business executives 2014: 3,309, business executives 2018: 2,090 [Full base sizes listed in the appendix] 97

98 European markets are divided; some feel it s increasingly difficult to define an effective business model as Turkey and Germany state improvements in this area Do you consider any of the following as key challenges to be restricting your business s ability to innovate efficiently? NET: Top 2 / A Challenge Above average increase from % +5 64% +25 Poland +22 France +21 Malaysia +5 point global average jump from The difficulty to define an effective business model to support new ideas and make them profitable -10 Turkey Below average increase from Germany Q25.Do you consider any of the following as key challenges to be restricting your business s ability to innovate efficiently? Not a challenge at all (1), not a real challenge (2), a bit of a challenge (3), a critical challenge (4) Base business executives 2014: 3,309, business executives 2018: 2,090 [Full base sizes listed in the appendix] 98

99 Appendix Edelman Intelligence /

100 Complete base sizes per year (country level) 2013: Base business executives: 3,309, Canada: 100, China: 200, Australia: 100, Sweden: 100, Germany: 100, Brazil: 200, Mexico: 100, India: 203, Singapore: 100, Japan: 100, South Korea: 100, Malaysia: 100, Russia: 200, Italy: 100, UK: 100, Poland: 100, UAE: 102, Saudi Arabia: 101, Israel: 100, Turkey: 100, Nigeria: 100, South Africa: 100, Indonesia: 101, Algeria: 100, Kenya: 102, France: : Base business executives: 3,309, Canada: 100, China: 200, Australia: 100, Sweden: 100, Germany: 100, Brazil: 200, Mexico: 100, India: 203, Singapore: 100, Japan: 100, South Korea: 100, Malaysia: 100, Russia: 200, Italy: 100, UK: 100, Poland: 100, UAE: 102, Saudi Arabia: 101, Israel: 100, Turkey: 100, Nigeria: 100, South Africa: 100, Indonesia: 101, Algeria: 100, Kenya: 102, France: : Base business executives: 2748, Algeria: 97, Australia: 106, Brazil: 200, Canada: 103, China: 207, France: 102, Germany: 101, India: 204, Indonesia: 101, Israel: 100, Japan: 103, Saudi Arabia: 100, Malaysia: 101, Mexico: 102, Nigeria: 100, Poland: 101, Russia: 101, South Africa: 105, South Korea: 102, Sweden: 102, Turkey: 103, UAE: 100, USA: : Base business executives: 2,090, Brazil: 150, Canada: 100, China: 150, France: 100, Germany: 100, India: 150, Indonesia: 80, Japan: 100, Malaysia: 80, Mexico: 100, Nigeria: 80, Poland: 80, Saudi Arabia: 80, South Africa: 100, South Korea: 100, Sweden: 80, Turkey: 80, UAE: 80, UK: 150, USA: 150 Edelman Intelligence /

101 Historical data tracking Historical data has been used from 2013, 2014, 2016 and this year s 2018 data. The only question that is comparable across all four years is Q1 - Innovation Champions. To compare scoring from previous years we have reweighted the previous total scores, so that countries that are not included in this year s GE GIB are removed, so only including the 20 countries that we have this year. This ensures all data is directly comparable. The UK was not included in GE GIB 2016 so an average score from 2018 data and from 2014 was created at act as a proxy. In 2013 France was not included so a proxy from looking at 2014 and 2016 data has been used. In 2016 Nigeria was not included so an average score from 2018 data and from 2014 was created to act as a proxy. This method (of reweighting the total scores and creating proxies) has been used consistently across all questions where we have compared historical data. Where tracking questions have been used for only 2016 and 2018 (because these questions were not tracked in 2013 or 2014), data for these questions is based on a 19 market total only as no proxy could be created for the UK in Edelman Intelligence / general electric 101

102 Appendix slides for Maximizing the Return on Innovation Edelman Intelligence /

103 2016 data not available More business executives in emerging markets say it s crucial to put digital capability at the core of their business model than they did two years ago It is crucial to put digital capability at the core of their business model NET: Top % 80% 81% 81% 58% 58% 63% 73% 53% 63% 31% 40% 63% 55% 75% 72% 68% 69% 62% 64% 60% 59% 58% 59% 57% 76 75% 65% 64% 37% 31% 59% 50% 70% 70% 59% 48% 50% 28% 74% 40% Increase Decrease Q16. On a scale from 1 to 10, how crucial do you think the following elements are for a company to be able to innovate successfully? [NET Top 3 Box] Base business executives 2018: 2,090, business executives 2016: 2,748, [Full base sizes listed in the appendix] 103

104 2016 data not available And business executives are putting this into practice with executives stating they do well at keeping digital at the core of the business My company currently puts digital capability at the core of its business model NET: Well / Top 2 Box 61% 90% 91% 89% 88% 73% 72% 71% 57% 71% 72% 85% 65% 78% 82% 73% 65% 76% 85% 93% 83% 90% 74% 81% 81% 87% 89% 84% 85% 80% 80% 76% 75% 74% 72% 72% % 69% 60% 85% 69% Increase Decrease Q17. How does your company currently perform against these success criteria? Base business executives 2016: 2,748, business executives 2017: 2,090 [NET: Well / Top 2 Box] [Full base sizes listed in the appendix] 104

105 2016 data not available Business executives in emerging markets increasingly state that it is crucial to use big data and analytics to improve strategy It is crucial to use big data and analytics to improve strategic knowledge and inform decision-making NET: Top 3 61% 80% 79% 63% 67% 81% 53% 66% 67% 75% 65% 72% 53% 60% 65% 65% 58% 82% 81% 62% 60% 58% 56% 65% 61% 40% 39% 34% 33% 60% 53% 65% 55% 58% 46% 75% 61% % 33% 75% 44% Increase Decrease Q16. On a scale from 1 to 10, how crucial do you think the following elements are for a company to be able to innovate successfully? [NET: Top 3 Box] Base business executives 2016: 2,748, business executives 2017: 2,090 [Full base sizes listed in the appendix] 105

106 2016 data not available The majority feel their company is better at using big data effectively than they were in 2016 My company uses big data and analytics to improve strategic knowledge and inform decision-making NET: Well / Top 2 Box 66% 93% 50% 74% 68% 89% 52% 73% 67% 82% 53% 65% 67% 78% 63% 74% 75% 85% 78% 87% 71% 80% 79% 87% 86% 93% 78% 84% 86% 91% 80% 79% 76% 76% 84% % 83% 76% 75% 62% 58% Increase Decrease Q17. How does your company currently perform against these success criteria? Base business executives 2016: 2,748, business executives 2017: 2,090 [NET: Well / Top 2 Box] [Full base sizes listed in the appendix] 106

107 2016 data not available Business leaders in emerging markets are relying more heavily on demonstrating the value of their innovations to clients and users It is crucial to demonstrate the value of their innovations to clients and users NET: Top 3 71% 88% 64% 80% 76% 60% 61% 73% 73% 84% 76% 73% 68% 68% 79% 75% 63% 64% 56% 67% 65% 75% 71% 54% 50% 44% 89% 81% 75% 65% 73% 63% 47% % 79% 65% 54% 51% 37% 36% 30% Increase Decrease Q16. On a scale from 1 to 10, how crucial do you think the following elements are for a company to be able to innovate successfully? [NET: Top 3 Box] Base business executives 2018: 2,090, business executives 2016: 2,748 [Full base sizes listed in the appendix] 107

108 2016 data not available And most countries feel they demonstrate this value well with countries at the lower end of the scale in 2016 catching up My company currently demonstrates the value of its innovations to clients and users NET: Well / Top 2 Box % 72% 93% 74% 74% 89% 79% 93% 80% 68% 67% 89% 85% 94% 71% 80% 78% 86% 83% 88% 93% 89% 88% 88% 84% 84% 90% 87% 87% 84% 75% 75% 85% 82% 80% 95% 88% 88% 80% 56% 53% Increase Decrease Q17. How does your company currently perform against these success criteria? [NET: Well / Top 2 Box] Base business executives 2018: 2,090, business executives 2016: 2,748 [Full base sizes listed in the appendix] 108

109 2016 data not available Emerging markets have seen an increase in the importance of demonstrating innovation s value to society It is crucial to demonstrate the value of innovation for society at large, and how it helps address or solve an important issue: NET: Top 3 78% 79% 78% 79% 75% 72% 72% 69% 67% 65% 65% 66% 64% 58% 56% 56% 56% 50% 52% 82% 73% 62% 58% 58% 48% 35% 36% 36% % 69% 67% 67% 56% 55% 51% 50% 48% 77% 42% 24% 24% Increase Decrease Q16. On a scale from 1 to 10, how crucial do you think the following elements are for a company to be able to innovate successfully? [NET: Top 3 Box] Base business executives 2018: 2,090, business executives 2016: 2,748 [Full base sizes listed in the appendix] 109

110 2016 data not available In emerging markets, executives think they are doing well in creating innovations that provide a value to society My company currently demonstrates the value of its innovation for society at large, and how it helps address or solve an important issue NET: Well / Top 2 Box % 91% 70% 70% 64% 83% 79% 74% 73% 62% 61% 60% 81% 92% 74% 85% 72% 80% 55% 63% 79% 86% 73% 78% 88% 85% 81% 78% 79% 80% 78% 79% 68% 68% 83% 64% 63% 89% 86% 84% 69% Increase Decrease Q17. How does your company currently perform against these success criteria? [NET: Well / Top 2 Box] Base business executives 2018: 2,090, business executives 2016: 2,748 [Full base sizes listed in the appendix] 110

111 2016 data not available Emerging markets are now more ready to accept a longterm return on investment than in 2016 It is crucial to be ready to accept a long-term return on investment to allow for breakthrough innovation NET: Top % 66% 66% 82% 72% 79% 49% 56% 69% 75% 67% 73% 63% 69% 73% 68% 66% 64% 61% 63% 58% 80% 78% 66% 64% 62% 62% 74% 75% 66% 66% 70% 61% 51% 59% 82% 49% 34% 33% 31% 35% Increase Decrease Q16. On a scale from 1 to 10, how crucial do you think the following elements are for a company to be able to innovate successfully? [NET: Top 3 Box] Base business executives 2018: 2,090, business executives 2016: 2,748 [Full base sizes listed in the appendix] 111

112 2016 data not available Emerging and Asian markets state they are doing well in accepting a long-term return on investment My company is ready to accept a long-term return on investment to allow for breakthrough innovation NET: Well / Top 2 Box % 70% 93% 64% 85% 73% 89% 71% 82% 82% 91% 65% 85% 93% 70% 78% 65% 73% 74% 81% 67% 74% 87% 86% 87% 84% 83% 84% 84% 82% 79% 62% 90% 86% 87% 80% 75% 76% 56% 58% 45% Increase Decrease Q17. How does your company currently perform against these success criteria? Base business executives 2018: 2,090, business executives 2016: 2,748 [NET: Well / Top 2 Box] [Full base sizes listed in the appendix] 112

113 Appendix slides for A More Challenging Environment Edelman Intelligence /