Dubai, UAE 19 February 2013— According to PwC’s Middle East Innovation Survey, companies in the region are more inclined than ever to adopt innovation in order to achieve business goals and growth sustainably The survey reveals that there is a clear call for organizations to drive the engine of innovation and growth as opposed to past models where companies were led by large government innovations initiatives.
Despite companies in the Middle East having significant growth ambitions, they still require confidence and true understanding of their ability to achieve impactful innovation. 26% of the survey respondents are pleased with the success of their innovation efforts; meaning that only a quarter of the companies are showing confidence to lead significant changes in their business models and industry consolidations efforts.
Growth and ‘the new cycle’
Innovation and growth go hand in hand. With the global economy learning how to cope with the Eurozone debt issues, companies in the Middle East must leverage opportunities and market conditions that allow for faster recovery and growth. The ‘new cycle’ of technology innovation, which includes a regional emphasis on R&D and innovation, localization of technologies such as mobile broadband and social media, and greater connectedness with the rest of the world, has created a regional sense of ambition across industries and infrastructures.
Major changes ahead
PwC’s survey results state that 91% of respondents are expecting their growth strategies to change considerably in the next 12 months with nearly four in ten expecting fundamental changes. The vast majority (80%) is expecting to step up their innovation investment and more than half of the respondents (57%) are anticipating ‘breakthrough’ or ‘radical’ changes that include technical and business model innovation.
Companies in the Middle East are moving towards innovation and the changes in business models, products and services vary between small steps for some companies, to radical breakthroughs for others.
Anil Khurana, lead Partner for the Middle East Practice of Consumer and Industrial Products & Services industry vertical and a member of the global Strategy and Innovation practice said: “Companies and governments both need to recognize the ‘new cycle’ of innovation and react swiftly to seize the countless opportunities in the Middle East. Companies seeking aggressive growth should have a clear innovation strategy in place, supported by customer-focus, flexible organizational structure and rewards scheme for innovation. Governments also play a role in endorsing the innovation environment by protecting intellectual property, incentivizing innovation, reducing bureaucratic barriers, and supporting business clusters”.
Companies that have reported to be successful in their innovation efforts are four times more in the growth lane than the companies who have reported to be less successful in their innovation efforts. PwC’s correlation and regression analysis highlights the criteria that differentiated the ‘successful’ innovators from the others. The results showcased that even though there is a wide availability and access to information about innovation, there are significant differences between successful and less successful innovators. PwC study identifies six key ingredients missing from the less successful companies:
1. Innovation strategy
2. Innovation investment
3. Customer focus
4. Joint working or ‘co-development’ with partners
5. Innovation culture
6. Progress and results measurement
Notes to the Editor:
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Established in the Middle East for 40 years, PwC has firms in Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Oman, the Palestinian territories, Qatar, Saudi Arabia and the United Arab Emirates, with around 2,500 people. (www.pwc.com/middle-east)
PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
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About the survey
PwC’s 2012 annual Middle East Innovation Survey for the private sector is based on survey data and select interviews over the past 6 months across the Gulf Cooperation Council (GCC) and other countries in North Africa and the Levant. We had 167 participants from companies in various segments, including financial services, telecoms, media and technology, services, industrial manufacturing, construction, transportation, energy, etc. Nearly three quarters of participants were top level executives, either chairmen, chief executives, vice presidents, managing directors, directors or in other c-suite roles. Participating companies had a mix of ownership structures, public and private, and came from a range of large and medium-sized enterprises, some with a multinational presence, others more focused on local or regional markets.
The full survey report with supporting graphics can be downloaded at www.pwc.com/middle-east
For 2013, PwC’s Middle East Innovation Survey will be part of a global survey, which is expected to be conducted during April-May, 2013.