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Conservatism at the top is holding back innovation and costing the UK £64 billion a year 

PA Consulting Group launches global innovation survey of 750 senior business leaders

Half of senior leaders in the public and private sectors confess to seeing a brilliant idea fail for avoidable reasons, according to PA Consulting Group’s global survey of 750 organisations. Almost half (47%) of senior leaders describe their innovation activity as, at times, a costly failure.  In the UK, this amounts to organisations flushing £64.7 billion down the drain each year.

Innovation – where an organisation takes an idea or invention and converts it into a new product or a service – is failing not because of governments or regulators but because of limitations within organisations. Lack of budget, people or skills, difficulty in scaling up ideas and a risk averse culture are the top three reasons innovation is failing.  

As Sajid Javid and George Osborne have been telling us, improving productivity is one of the biggest challenges facing the UK economy. Innovation is central to fixing this challenge and British industry has a role to play in stemming the flow of wasted investment in innovation. 


  • British senior executives reported more innovation failures than their European counterparts
  • only 7% of UK organisations provide rewards or bonuses to staff to encourage innovation, compared with 26% in Sweden and Germany 
  • Mexico and Sweden are best at embedding a culture of innovation, while the UK lags behind Norway, Germany and Denmark 
  • UK senior managers are the worst offenders for talking about innovation more than they do it; 62% of UK senior managers admitted to this 
  • almost 9 out of 10 Swedish companies say they are developing new digital capabilities to disrupt or lead their sector compared with just over half of UK companies
  • life sciences is the most innovative sector and defence the least. 


The most innovative organisations we surveyed shared a series of characteristics: 

  • often back high-potential but risky innovations (57% of leaders vs 36% of the rest)
  • learn quickly from mistakes in innovation (89% of leaders vs 60% of the rest)
  • harness digital technology to accelerate their innovation initiatives (87% of leaders vs 64% of the rest)
  • put innovation at the heart of their corporate culture and mission (71% of leaders vs 43% of the rest).

Colm Reilly, economic development expert at PA Consulting Group, says: “All companies, irrespective of size or sector, need innovation to grow and thrive. In a world of stagnating productivity, the global economy needs successful new ideas more than ever.

“Companies need to find ways of embedding innovative thinking at all levels, learn quickly from failure and harness the right mix of talent to implement new ideas. This will need strong leaders who encourage and nurture innovation that will deliver long term profitability and growth.”  


  1. innovation has to move beyond the R&D department and cannot be treated in isolation, with a single department tasked to come up with bright ideas. It is something that has to be embedded in the business, from the boardroom to customer service
  2. consider Chief Innovation Officers to provide the focus and drive. They must have a seat on the board to reflect the strategic priority that is required to embed a culture of innovation 
  3. incentivise innovation by rewarding all staff from top to bottom through rewards and bonus 
  4. avoid over-zealous return on investment assessments that can stifle new innovation, especially in the early stages. Success should be measured by value and not just by financial calculation
  5. Go beyond token digital and adopt a ‘disruption mindset’ to ask whether digital technologies could make tried-and-tested approaches more effective. 


  • 33% Have seen a brilliant idea fail for reasons that could have been avoided
  • 57% Are striving to be pioneers
  • 53% Are developing digital capabilities to disrupt or lead their sector
  • 51%  Say innovation has, at times, proven to be a costly failure
  • 62% Talk about innovation more than they do innovation
  • 64% Say people use ‘innovation’ to describe different things
  • 7%   Provide rewards or bonuses to staff to encourage innovation
  • 24% Strongly agree their leadership is good at nurturing innovation.  

To find out more about how we help companies to innovate, please contact us now.

For a copy of our innovation report click here.


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