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Innovation for peak performance

Ongoing economic uncertainty and increasingly fierce global competition are forcing companies to place greater emphasis on R&D excellence.

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For powerful innovators over 5% revenue invested in R&D generates over 20% of revenu from new products

Explore the connection between R&D and revenue generation and understand why a conservative approach to innovation could be holding your business back.

In our study, 'Innovation for peak performance', we set out to establish the key components of a successful innovation strategy in energy-intensive industries. We surveyed 61 participants from 14 countries, across the mechanical engineering, high-tech, consumer goods and automotive industries.

From our analysis, we judged high-tech, automotive and mechanical engineering to be ‘powerful innovators’, in that they invest over 5% of their revenue in R&D and generate over 20% of revenues from new products. Consumer goods companies invest less and have smaller revenues from new products as a result.

We found that the conservative approach to innovation, focusing on existing customers and products, is still in vogue – there is limited appetite for the diversification that would create new growth opportunities.

Some key insights from the report

If we compare companies' R&D investment with the revenue from new products (NPR) that they achieve as a result, as a percentage of total company revenue, we identify four distinct type of innovator.

Different sectors clustered to compare R&D spend against new product revenue

Open innovation is on the rise. In the next decade, internal models will decrease by 23% and collaboration networks will increase by 50%.

Open innovation is on the rise
From all respondents; 50% rely on R&D employees. 10% frequently cooperate with technology partners

Less navel-gazing

A shift towards more collaborative and open models, especially collaboration networks, has started.

But more than 50% of responding companies continue to rely on R&D employees, while only 10% frequently cooperate with technology partners.

Innovation is going global – more than 60% of the respondents consider Asia as a growth region for R&D investments.

Innovation is going global
R&D is going East

R&D spend is going East

China was ranked by 70% of all respondents as the country where the highest growth in R&D investment might occur in the upcoming years.

North America and Europe remain stable with similar priorities for the companies to invest in these two regions.





% of respondents ranking R&D growth potential

R&D efficiency presents a new dilemma – companies should reduce their time-to-market if they want to stay competitive.

12% reduction target in time-to-market within ten years
Time-to-market across sectors and % reduction target

Based on our findings, we have developed an agenda for companies to achieve innovation for peak performance across innovation strategy, global R&D footprint and R&D efficiency.

To find out more about the innovation agenda for your business

Download the full report

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