New Delhi [India], June 13 (ANI): Companies are prioritizing innovation more than ever before, yet they have never been less prepared to deliver on those aspirations. In 2024, a record 83 per cent of senior executives have ranked innovation among their organizations’ top three priorities, but only 3 per cent of companies qualify as innovation-ready, a steep drop from 20 per cent in 2022.
According to a report released by Boston Consulting Group (BCG), in India the focus on innovation appears even more intense at 96 per cent. However, there continues to be some disconnect between the strong focus on innovation and the speed at which it gets embedded into the organization engine from an execution point of view.
“In India, one of the challenges often faced by companies is that innovation happens in silos – which has implications for required capital allocation, senior executive steering, and cross-functional management bandwidth, resulting in slower rates of adoption”, said Akshay Kohli, Managing Director and Partner, BCG.
The report added, in order to bridge this gap, BCG believes it is important for companies to more explicitly link the innovation agenda to the overall business strategy, starting from the top. Secondly, systematically leveraging Generative AI to fuel the innovation journey can further accelerate adoption at scale.
In the report, BCG assessed companies’ innovation maturity on a 100-point scale and surveyed over 1,000 senior innovation executives around the world. Among the executives surveyed, less than half–around 48 per cent–felt that their organization made some effort to link its business and innovation strategies, but only 12 per cent reported strong links between the two that were delivering real impact. However, innovation activity, i.e., the number of active projects, has remained steady.
The report further added that when business leaders were asked to rank the challenges facing their innovation teams, strategy concerns topped the list, with 52 per cent of respondents citing an unclear or overly broad strategy as one of their top three challenges. Rising interest rates and talent constraints were cited among the top three concerns of 47 per cent and 44 per cent of innovation executives, respectively.
The report also highlighted that not all companies are acting on their concerns. Just 30 per cent of respondents said they’re planning to refresh their innovation strategy. Instead, 70 per cent plan to focus on process optimization moves, such as boosting the efficiency and speed of their operating models, and 65 per cent seek to increase the number of projects in their portfolio.
On the use of AI, around 86 per cent of executives said their organizations were experimenting with GenAI for innovation, R&D, or product development; however, most remain in the early stages. Just 8 per cent said their organization is currently applying GenAI at scale.
While most organizations were already experimenting with classical predictive AI, the rise of GenAI seems to have shaken many innovators’ assessments of the quality of their AI achievements to date.
Between 2022 and 2024, the proportion of executives reporting their companies had implemented AI with impact has declined from 37 per cent to 10 per cent.
The report highlights that in the GenAI race, “ready” innovators are already moving out ahead. They’re applying GenAI more frequently in a single use case and are 5 times more likely to have applied it at scale.
“GenAI can boost efficiency and bring fresh perspective to an organization, empowering its innovation function to invent faster and better, but without a strategic North Star to guide the organization, even the most efficient innovation function is likely to underperform its potential,” said Michael Ringel, a BCG managing director and senior partner and a co-author of the report.
Around 85 per cent of Indian companies are starting to use GenAI for innovation, though most are still at an early stage of their journey. Overall readiness has declined in India marginally, at par with global average. (ANI)
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