I had the opportunity to interview GE‘s Chief Marketing Officer, Beth Comstock, recently as she was on her way to the World Economic Forum in Davos, Switzerland. With the Global Innovation Barometer for 2011 just out, I wanted to probe a bit further on what some of the key takeaways were and to get some of her insights on the importance of governments and other members in creating thriving innovation ecosystems.
Here is the text of the interview:
1. Why did you create the Global Innovation Barometer? What were you hoping it would tell you?
At GE, we innovate on a global scale, every day. We thought it would be interesting to explore how executives in different countries view innovation and compare how those views align with how we see the world.
By identifying the drivers, deterrents and global perceptions around innovation, we found that the rules around innovation are changing, and that companies, like ours, will need to evolve our strategy in order to stay competitive, drive growth and contribute meaningfully to the world.
2. The environment for innovation is different by country. What are you picking up from these differences and how does that alter GE’s approach locally versus globally?
The environments are very different, which means so are their needs. This is a challenging dynamic for any global company. To compete in a global marketplace, we need an approach to innovation that leverages our global scale while also allowing us the flexibility and nimbleness to address local needs. We are investing to make sure we have the framework in place to connect capabilities and technologies across the globe – through our Global teams and our five global research centers – and to harness local capabilities and talent to even better understand local markets and tailor those technologies so they deliver value to markets.
3. Do you feel satisfied that the proper resources are being allocated and the right support is being offered by governments? If not, what do you feel that governments should be doing to support innovation that they are not? Which countries are doing the best job?
We found through the study that innovation and growth go hand in hand. Countries where business believes the environment is more competitive actually delivered higher GDP growth (5.19% average) than those countries where business was less confident in their operating environment (2.32% average), according to the IMF.
Government plays a key role in nurturing an environment that allows innovation to flourish. This means ensuring that all businesses, no matter where they’re based, are able to operate on a level playing field, that ideas and intellectual property are protected, that there is a strong, supportive infrastructure in place.
At GE, we see five key policy paths that governments can pursue to encourage innovation:
- Encouraging the transfer of technology globally across boarders;
- Enacting stronger IP and effective, efficient patent system to protect ideas and technologies;
- Setting regulatory and cultural conditions that allow for strong partnerships between government, academia and the private sector;
- Offering companies the right kinds of incentives, such as tax credits, to drive innovation; and
- Implementing policies on human capital, education and infrastructure that help facilitate innovation.
4. What was the biggest surprise for you from this year’s survey?
- There were some interesting surprises within many of the individual country landscapes, such as the overwhelming optimism of the MENA markets and the comparative pessimism of the BRICs.
- The impact of the financial crisis on innovation efforts wasn’t necessarily surprising, but it was concerning, especially when you look at how companies are shying away from risk and shifting their investments away from R&D and new product innovations to safer, more incremental innovations.
- At a global level, we were surprised to see the disconnect between the importance of partnerships, which 86 percent of respondents believe is part of the new model of innovation, and the need to pursue them in the near term. Only 21 percent of respondents believe finding partners is an immediate priority to innovate more on a day-to-day basis. I think this means that business knows what it needs to do, but also recognizes that it’s hard. Partnerships are a challenge – it’s inherently risky to open up your doors and invite collaborators in to see and be part of your world. But the return on that risk can be far greater than what you can accomplish on your own. Bringing together great minds from both the public and the private sectors can help deliver more valuable solutions.
5. It is suggested that innovation strategies are being challenged both short term and long term. How you balance these?
The new global economy means that innovation needs to be constant. Things are changing so rapidly that you’re always looking around the corner. One minute you think you’re ahead and the next you’ve fallen behind. At the same time, we have this challenging dynamic where half of the world is growing and advancing rapidly while the other half is in recovery. How do you adapt your innovation strategies to survive and grow in both environments?
From a long-term point of view, GE continues to invest across the entire spectrum of innovation – from new products and technologies, to incremental processes, to new business models and markets. We have steadily increased investments for future growth. Since 2000, GE has invested approximately $50 billion in product technology, and has boosted company funded research and development 31 percent over the past four years.
From more of a short-term perspective, we have steadily increased our collaborations with companies large and small, start-ups, entrepreneurs and governments to help accelerate our innovation efforts. For example, we launched just this last fall our healthymagination challenge – a $100 million call to scientists, researchers and entrepreneurs meant to identify and accelerate ideas that advance the detection and diagnosis of breast cancer. We expect to announce the winners of that Challenge next month.
6. When I look at the survey results I don’t see a lot of actionable data. What actions are you planning to take now that you wouldn’t have taken before you saw the survey results?
Creating the right conditions for innovation is a mix of science and art. At GE, we’re continually evaluating our innovation strategy to ensure alignment with the changing needs of today’s more globalized, multi-speed world.
As we’ve seen through the results, the great innovations of the 21st century will come from a team of collaborators, will be driven by creative minds, will be localized to meet the needs of our communities, and will most of all deliver value to society.
The data this year validates what we’ve known for some time, that localization of our offerings is key to our ability to compete. A one-size-fits-all approach won’t work. Not everything we sell has an application in every country where we operate so we need to leverage local knowledge and talents to customize our offerings and add value. Our global research and development centers in China, Brazil, Germany, India and the U.S. are helping us connect technologies and capabilities at a global level, but it’s our local talent who can help us tailor solutions to what our customers need. Building up our talent pools in high growth markets is a high priority for us.
7. What did you learn from your own internal innovation efforts in 2011 that you hope to build on in 2012?
GE has always been a leader in using technology to gather, process, understand, connect and capitalize on the vast amounts of data produced by its products to make better more efficient products. Now, as gadgets are getting more mobile, and more powerful, we have more information to process than ever before. Our innovators are now connected to customers in ways we never imagined, able to exchange and evaluate information in real time. We’ve begun to harness that connection through the development of smartphone and tablet apps, such as GE’s MyEngines, which lets airlines monitor where their engine is in the maintenance or repair cycle, and through new software solutions, such as Centricity Perinatal, which help clinicians in maternity wards keep an electronic eye on mothers and babies. And this is just the beginning. The role of big data, and the ability of our innovators to make sense of it and translate findings into better, more efficient, low cost solutions for customers is now a major focus for GE and I look forward to seeing what we deliver in 2012.
8. Would you consider using the Innovation Excellence community to refine the questions in next year’s barometer?
Yes. We value the insights derived from the Barometer and are always open to suggestions on ways to hone our methodology and strengthen the survey tool.
As you know, this year we expanded, surveying nearly 3,000 senior business executives in 22 countries, up from 1,000 executive in 12 markets in 2010. The increase has been extremely helpful in providing a more representative global sample, yielding more accurate insights into that state of innovation globally.
Braden Kelley is a Social Business Architect and the author of Stoking Your Innovation Bonfire from John Wiley & Sons. Braden is also a popular innovation speaker and trainer, and advises companies on embedding innovation across the organization and how to attract and engage customers, partners, and employees.