However, to innovate successfully, they must tackle the challenges of funding, talent, and culture
More rapid and effective innovation is critical to future growth according to 95 per cent of business leaders. Despite a complex mix of concerns such as economic uncertainty and inflation, access to talent, and the ongoing pandemic, business leaders’ confidence is up by nine percentage points from last year. These are some of the key findings from HLB’s Survey of Business Leaders 2022 – Powering Your Innovation Engine. Others include:
• 54 per cent expect the rate of global economic growth to increase, 30 per cent expect it to stay the same in 2022
• 61 per cent cite inflation as a concern
• 86 per cent feel more confident in their ability to innovate as compared with pre-pandemic
• 69 per cent agree or strongly agree that market disruption motivates you to innovate.
“Economic factors and the emergence of new COVID variants, as well as other macro trends around talent and cybersecurity, will pose challenges to even the most progressive innovation strategies,” states Marco Donzelli, global CEO at HLB. “Nevertheless, business leaders are grasping the opportunities that market changes present to innovate and understand how important innovation is to their future growth.”
To gain insights into the concerns and priorities of business leaders in 2022, HLB surveyed 586 clients and senior executives from 46 countries. The report highlights that although the pandemic has been an exceptionally difficult and challenging period for business, leaders have emerged feeling more confident to challenge the way things get done and energised to grow their businesses through innovation. However, to innovate successfully, business leaders must tackle the challenges of funding, talent, and culture. These areas are explored in detail in the report which also includes guidance for business leaders to help them examine their firms’ approach to innovation in more detail.
Pandemic underlines the need for innovation
The vast majority of business leaders agree rapid and effective innovation is crucial to future growth and 89 per cent believe they can do so at a greater speed than before. But with only a small majority (55 per cent) setting budget aside for innovation, funding can be a barrier to successful execution. Over three-quarters of the leaders polled said they are funding their innovation strategies from cash flow. 28 per cent consider debt refinancing and 25 per cent plan to raise equity funding, with smaller percentages exploring other financing options.
Finding and retaining innovators is another challenge CEOs looking to innovate need to overcome, with one in three stating capabilities of their people is a barrier to business innovation. Crucially, talent acquisition is the second most important area of weakness that leaders intend to focus on in 2022, cited by 42 per cent of leaders versus 26 per cent in 2021.
Other barriers to innovation identified in the survey are of an organisational nature, with lack of time (35 per cent) being the biggest hurdle to overcome followed by factors such as operational structure (27 per cent), lack of vision (26 per cent) and keeping the status quo (26 per cent).
Access to tech key to successful innovation
Access to emerging technology tops the list for key enablers of successful innovation by 44 per cent, with AI, cloud and RPA listed as most important. The report finds technology and innovation joined at the hip. Over half of businesses are focusing their innovation efforts around emerging technology and launching new products or services. 42 per cent of leaders seek to adopt more emerging technologies to achieve growth in the next 12 months. Non-digital technologies are also considered of great strategic interest, with renewable energy cited by 61 per cent, and electrification by 46 per cent of business leaders.
