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Businesses Continue To Struggle With Innovation, According To CapGemini Report

Does your business struggle to innovate? According to a recent CapGemini report, you’re not alone. Businesses have been struggling with innovation, with many claiming that traditional R&D is ‘broken’.

The headlines of the report are that despite many businesses investing in innovation centers and hubs, many are failing due to lack of understanding. This is an issue we see everyday at ENO8, where clients often come to us after previous innovation attempts have failed. 

We’re passionate about innovation, and want every client to have as much success as possible, so finding that so many innovation centers fail is shocking. We’re looking at the findings of the report to decipher what businesses can do differently to innovate effectively.


The CapGemini report offers some very interesting insights on how innovation is changing. We believe that these insights based on the leading 200 companies, are accurately mapped onto the innovation landscape as a whole. Businesses are struggling to innovate, and we need to do more to make the process easier. 

Take a look at the key stats pulled from the report:

  • The report found that nearly 40% of the leading 200 companies globally have set up innovation centers in a tech hub

Companies are setting up innovation centers where they can collaborate with top talent and bounce ideas off of other companies that are innovating. However, as the report shows, this is perhaps not the best way to innovate. Tech hubs provide a great introduction into innovation, but whether a company should invest all of their R&D budget on working in tech hubs is to be debated.

  • Of all innovation centers surveyed, most belong to the US and Europe, with 29% of innovation centers being based there.

Asia came in a close second here, however the US and Europe are leading the way when it comes to innovation centers. 

  • The strongest areas of innovation are well-established technologies such as mobility (63%) and big data/analytics (51%). 

Surprisingly, many businesses still don’t have the more well-established areas of innovation nailed down. As a result, it seems they are working quickly to fix that by investing in innovation in those areas.

  • Silicon Valley still leads the way, with 61% of companies having established one or more centers in the Valley.

No real surprises here, however we expect this to change as COVID continues to rear its ugly head. With a more remote work model coming in across the globe, it’s likely that Silicon Valley may see a fall in big companies seeking to carry out innovation projects there.

  • More businesses are also seeking to find their own cities to host innovation hubs. The report states that the top 10 cities for innovation represent only 35% of total innovation centers.

As expected, companies are becoming more comfortable with innovating in their own cities and seeking to make their innovation centers work for their business. Gone are the days when you had to move to the Silicon Valley to innovate. Now that we work remotely, innovation can be done anywhere.

  • However, according to the report, 80-90% of innovation centers fail.

Possibly the most shocking quote from the report was from an innovation expert who believes that 80-90% of innovation centers fail. We were disappointed to read this, but not necessarily surprised. Many businesses go into innovation blind, and this impacts the results of their work. This is why companies opt to work with innovation labs like ENO8 so that they have a higher chance of success than going it alone.

How Can We Increase Success Rates With Innovation Centers?

ENO8 recently wrote an article on how to increase success rates with innovation programs, which runs through the steps that any innovation program should offer. Similarly, this report offers another take on innovation centers and how to improve their success. To deploy successful innovation centers, the report recommends the following strategies be employed: 

  • Define a clear purpose of the innovation center

Defining a clear purpose for the innovation center enables you to set goals. Purpose and objectives need to be set out with input from everyone in the company, including the leadership team.

  • Create a strong governance model, with senior leadership support, to implement innovation opportunities across the enterprise

The entire enterprise needs to understand the accountability associated with the innovation center. The innovation center must be a real group effort, with opportunities discovered across the whole business.

  • Have an optimal area to focus – neither too futuristic,  nor too close to current business operations

Each innovation center will be working towards a specific goal, however as a general rule it is important to make those goals realistic. This means focusing on a goal that is different to current business operations, but not so progressive that they get lost on people.

  • Closely involve other areas of the business to avoid isolation

Silos is one of the key factors that holds innovation centers back. When parts of the business withhold information or don’t want to participate in innovation, it can create a toxic culture that is the opposite of progressive. 

  • Create a truly cross-functional team that thrives in both structured and unstructured environments

Cross-functional teams are able to drive innovation forward, as they represent each area of the business in the thought process. Creating a team with a varied skill set provides assistance with the breakdown of Silos and can ensure that an innovation center delivers solutions that work for every area of the business.

  • Operate with a degree of budgetary freedom, but know when to abandon projects

The innovation center’s goal should be to work through ideas efficiently, so that they can be used or abandoned. Operating with the freedom to fully explore these ideas is important, but it is also key to know when to stop. An innovation center will work through the processes of idea generation, idea validation, product-Market fit and then the creation of a minimum viable product.

  • Work with a diverse group of partners in the innovation ecosystem, but use sound judgment when selecting them

Utilize the knowledge and experience in your team to work with a diverse group of partners. Within the organization, and externally there will be incredible opportunities to bounce ideas off others and work with professionals in the innovation space to drive your business forward.

This summary of the CapGemini report offers great insight into how innovation centers are currently operating and how they can be improved. To learn more, read our recent article on why innovation labs fail to get a good idea of where your innovation process can improve.


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Jeff Francis

Jeff Francis is a veteran entrepreneur and founder of Dallas-based digital product studio ENO8. Jeff founded ENO8 to empower companies of all sizes to design, develop and deliver innovative, impactful digital products. With more than 18 years working with early-stage startups, Jeff has a passion for creating and growing new businesses from the ground up, and has honed a unique ability to assist companies with aligning their technology product initiatives with real business outcomes.

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