The technology industry is a high performer in terms of generating
growth through innovation, but will need to increase the volume and
frequency of new products and services to sustain this performance,
according to a new global survey by international consultancy firm PricewaterhouseCoopers.
The survey found that based on the percentage of revenue generated from
new products and services, the technology sector (69 percent) leads 26
other industry sectors, its nearest rival being the energy sector
(50 percent).
The ‘Innovation and Growth: A Global Perspective’ survey report is based
on responses from board directors of 800 organizations throughout the U.S.,
UK, France, Germany, Spain, Australia and Japan.
“The fast-changing nature of the technology sector, particularly the
explosion in e-business, is clearly a significant driver in its
performance,” said TICE industry group leader Martyn Mitchell, “and we can
be proud that a considerable level of innovation exists in our own backyard.”
While innovation is strong in the sector, technology companies were
found to launch on average 13 new products or services per year, only half
as many as the entertainment and media sector which leads on this measure.
Mitchell said this constituted a warning for the technology sector.
“Given a general trend towards competition through new products and
services and a high, but unpredictable failure rate, companies will need to
increase the volume and frequency of new products and services to sustain
their good performance on profitable growth from new products,” he said.
Mitchell also said there would be continuing pressure to increase
the level of innovation in new products and services in order to sustain
performance. “Increasingly, it will not be enough to be new. You will have
to be very new.”
Another area of concern for technology companies is their relatively poor
performance on time to market. According to the
report, electronics and computing companies typically took 40 weeks to get
new products and services to market.
The survey found a close link between financial performance and time to
market, with the top five percent of companies (across all industries)
typically taking less than 16 weeks to get new products and services to
market. “Fundamentally, technology companies must find ways of speeding up
their innovation processes,” said Mitchell.