THE FUTURE OF INNOVATION IN ASIA PACIFIC - Getting ready to govern innovation more, not less - Accenture
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THE FUTURE OF
INNOVATION IN
ASIA PACIFIC
Getting ready to govern innovation
more, not less
Provocative thinking, transformative insights, tangible outcomes
About the authors
Gianfranco Casati Dr. Vedrana Savic Himanshu Patney
Chief Executive Officer - Managing Director of Senior Principal of
Growth Markets Thought Leadership at Thought Leadership at
Accenture Research Accenture Research
Gianfranco Casati is the chief executive Vedrana is a global thought leader and Himanshu has wide experience in corporate
officer of Accenture in Growth Markets, with published author in top business and finance and valuation. His work is focused on
management oversight for all industries and academic journals. Her work is focused on building and implementing diagnostic
services of Accenture’s business in Asia portfolio innovation strategy, industry frameworks and models to better understand
Pacific, Africa, the Middle East and Latin disruption, value creation in the post-digital the probable future financial impact of
America. He is also a member of Accenture’s age, and organizational renewal. She has today’s business decisions. He explores how
Global Management Committee. Gianfranco extensive experience in corporate strategy organizations generate long term value
has helmed his current role since 2014. and management consulting and has through innovative business models.
advised executive teams of large companies
Prior to this role, Gianfranco was group chief across Asia Pacific, US and Europe.
executive of Accenture’s Products group,
which served clients in the air, freight &
travel services; automotive; consumer goods
and services; industrial equipment;
infrastructure and transportation services;
life sciences; and retail industries.
Acknowledgements
The authors would like to thank Paul Nunes, Karina Gan, Koteswara Ivaturi,
Victor Ekpu, Kevin Millan, Charchit Joshi for their work and contributions.
THE FUTURE OF INNOVATION IN ASIA PACIFIC 2
Contents
02 About the authors 27 Blend well for best results
04 The increased appetite for 28 About the research
innovation
31 References
09 The secret sauce for
successful innovation
13 Rethinking your innovation
investment strategy
20 Get ready to govern
innovation more
THE FUTURE OF INNOVATION IN ASIA PACIFIC 3
The increased appetite
for innovation
THE FUTURE OF INNOVATION IN ASIA PACIFIC 4
The economic uncertainty
emanating from the
unprecedented COVID-19
pandemic outbreak in early
2020 is making business
leaders rethink their innovation
strategies. In 2019, innovation
was high on the agenda of Asia
Pacific companies: over half of
innovation investment (on
average) was channeled into
the most established, legacy
businesses; in contrast, only 18
percent was allocated to
Asia Pacific is a hotbed for innovation, For example, Louis Vuitton, the
emerging businesses. Is this not only because of the demands of its most valuable luxury brand globally
still the best allocation strategy immense markets (it is home to 60 is now making a move into the culinary
given the current crisis? percent of the world’s population)1 but world: despite the upheaval caused by
the very avid appetite for business-led the COVID-19 pandemic, the company
This paper discusses why
innovation. Consider this: There are proceeded with its plans to open its
companies should allocate
over 400 unicorns worldwide – 140 of first flagship restaurant in Osaka,
innovation investments based on
them are in Asia Pacific.2 Beyond the Japan in the first half of 2020.3
their businesses’ future potential–not
young, entrepreneurial companies, the
solely on today’s needs–and the role
region also continues to inspire global
that governance plays in helping
leaders to step outside of their comfort
extract value from those investments.
zone and use innovation in new ways to
expand their portfolio of businesses.
THE FUTURE OF INNOVATION IN ASIA PACIFIC 5
According to Professor Eugene Fitzgerald, In Asia Pacific, while most companies strive The company has been actively attracting
CEO of the Singapore-MIT Alliance for for innovation, they often struggle to turn global investments even during the times
Research and Technology (SMART): associated investments into growth. Why? of COVID-19 pandemic: Jio Platforms has
Because they do not direct their innovation raised $13.72 billion in less than 2 months,
efforts strategically and with the right discipline. which marks the largest continuous
“To me, innovation is Of course, there are notable exceptions. For fundraising action by a company
example, Reliance Industries, which operated as anywhere in the world.7
the embodiment of a useful a major player in the oil and gas sector since the
idea in the marketplace.4 early nineties, decided to venture into
telecommunications in 2016.
But instead of concentrating Back then, nobody expected that within a few
only on businesses that serve years, Reliance Jio would become India’s largest
the needs of today’s markets, telecom player, in both revenue and market
share.6 While the venture into telecom sector was
you need to allow for unfolding, Jio Platforms (a technology subsidiary
of Reliance Industries) was investing in digital
uncertainty to arrive, by platform with an aim to build a digital society
channeling innovation into powered by Reliance Jio’s network.
emerging businesses, where
future growth will likely
come from.”5
THE FUTURE OF INNOVATION IN ASIA PACIFIC 6
FIGURE 1
Executives say that they expect to
increase innovation investments to the Asia Pacific companies are embracing innovation across their
tune of 1.8 times by 2024, across their business portfolios
entire portfolio of businesses. For the % of respondents who expect to apply each type of innovation to a “Large extent” or
“Very large extent” in “2019” vs “in the next 5 years”
287 companies across Asia Pacific that
we surveyed in 2019, this means
21% 23% 23%
allocating nearly 14 percent of their Emerging
revenues to innovation activities 56% 52% 56%
BUSINESS MATURITY LEVEL
(including R&D activities, new
technologies, acquisitions, joint 27% 27% 32%
ventures and partnerships). Growth
57% 54% 57%
The adoption of innovation has an impact on
businesses with varying levels of maturity,
including legacy (the most mature businesses),
growth (those experiencing strong market 59% 53% 53%
Legacy
demand) and emerging (the newest ventures yet 81% 76% 69%
to be scaled). For example, when it comes to
emerging businesses, 2.5x times as many
Incremental Breakthrough Disruptive
companies expect to apply innovation in 2024
when compared to 2019 (Figure 1).
INNOVATION TYPE
2019 Next 5 years
Sample N = 287 companies from Asia Pacific
Source: Accenture Portfolio Innovation Survey, 2019
THE FUTURE OF INNOVATION IN ASIA PACIFIC 7
Innovation should result in a tangible impact,
such as increasing your company’s top line. However,
expanding your innovation budget will not be enough.
What’s needed? Greater commitment to governing
innovation across your entire portfolio of businesses.
Many companies assume governance will stifle ingenuity.
However, our research reveals that increased governance
can create the right conditions for innovation to thrive in
the right businesses, especially in times of crises.
THE FUTURE OF INNOVATION IN ASIA PACIFIC 8
The secret sauce
for successful
innovation?
Governance.
THE FUTURE OF INNOVATION IN ASIA PACIFIC 9
To better understand how FIGURE 2
companies govern innovation, we Portfolio Innovation
utilized a proprietary framework
called Portfolio Innovation: the INNOVATION TYPE
application of incremental and
non-incremental (breakthrough Incremental
innovation
Breakthrough
innovation
Disruptive
innovation
or disruptive) innovation across
Enables small Enables new Enables an entirely
businesses with different improvements or product or service new offering to
maturity levels (Figure 2). extensions to variations, using a address an unmet
existing offerings new technology need
BUSINESS MATURITY LEVEL
To test this model of Portfolio Innovation, we
surveyed 1,090 executives globally (including
Emerging businesses
287 from Asia Pacific) and interviewed over 20
global experts. The most nascent ventures; new
business models, yet to be scaled
We uncovered how companies are applying
different types of innovation (disruptive,
Growth businesses
breakthrough and incremental) across their
businesses. Experiences strong market demand;
based on differentiated offerings
We also learned how they extract tangible
value from those investments: namely, by
Legacy businesses
adopting what we call innovation
governance rituals. (See page 11) The oldest, most mature, businesses;
provide steady cashflows
THE FUTURE OF INNOVATION IN ASIA PACIFIC 1012 Governance rituals enable innovation
As part of the innovation survey, we examined
governance rituals across four stages of innovation:
Inspiration Ideation Experimentation Scaling
1. Put innovation at the 4. E
veryone generates 7. E
xperimentation 10. Scale with technology
center of corporate ideas to improve existing investments are made as partners
strategy offerings part of the budgeting
11. Scale with talent
lifecycle
2. Actively communicate 5. A diverse team of partners
the innovation agenda to experts generates ideas 8. E
xperimentation
12. S
cale through an
employees and the for brand new offerings investments are funded
innovation lab/digital
investor community gradually
6. Identify disruptive ideas factory
3. Actively build a culture with the help of tech 9. Experiments are
of innovation partners conducted by an
innovation lab/digital
factory
For more information see About the research.
THE FUTURE OF INNOVATION IN ASIA PACIFIC 11According to Kiran Mazumdar-Shaw, Chairperson and Our research reveals that when companies are
Managing Director of Biocon Limited: struggling to achieve growth, many concentrate
their innovation resources in the businesses
“Large organizations typically providing the highest share of revenue.
get stuck at the ideation stage But with a forward-looking innovation investment
because success tends to tempt strategy and more disciplined governance, leaders
people into doing the same things can allocate resources to the right businesses with
future potential in mind, not only the needs of today.
that made them successful in the
first place. When there is already a
successful model, management
focuses exclusively on exploiting the
‘tried and tested’ strategy by aligning
their R&D, operations, processes and
culture to it. When new ideas stop
being generated and innovation
models stop evolving, businesses
put themselves in danger of
obsolescence from new and
disruptive ideas.”8
THE FUTURE OF INNOVATION IN ASIA PACIFIC 12Ingredients for success
Rethinking your innovation investment strategy
THE FUTURE OF INNOVATION IN ASIA PACIFIC 13To turn innovation investments FIGURE 3
into growth, chief strategy and Two portfolio models: Where do you channel your innovation investments?
chief innovation officers need to MATURE PORTFOLIO BALANCED PORTFOLIO
first determine how the composition
of businesses in their portfolio
will need to evolve in the future,
and then set their investment
strategy accordingly. We have
14%
identified two main portfolio models. 25%
Mature portfolio companies generate more 23%
than half of their revenue from legacy 36%
businesses today. In contrast, balanced
portfolio companies generate more than 63%
half their revenue from growth and 39%
emerging businesses today.
In our sample of 287 companies in
Asia Pacific, a vast majority of companies
(75 percent) have a mature portfolio today,
while only 25 percent are balanced portfolio
companies (Figure 3). This situation is not
expected to change dramatically any time
REVENUE
soon; in the next five years, 64 percent of CONTRIBUTION (%) Legacy businesses Growth businesses Emerging businesses
companies expect to retain a mature
portfolio, while only 36 percent will
have a balanced portfolio. Sample N = 287 companies from Asia Pacific
Note: Mature Portfolio Companies N=215 (75% of the total). Balanced Portfolio Companies N=72 (25% of the total).
Percentages represent average revenue generated by each business (legacy, growth, emerging) in the portfolio.
Source: Accenture Portfolio Innovation Survey, 2019
THE FUTURE OF INNOVATION IN ASIA PACIFIC 14From these two portfolio models, two FIGURE 4
innovation investment strategies emerge. Getting the innovation balance right is key to driving
Will an organization focus on revitalizing the portfolio growth
legacy business—a mature portfolio—or will it REVENUE GROWTH BY PORTFOLIO MIX (Asia Pacific)
double down on its growth and emerging Past Revenue growth (2013-2019); (2013=100)*
businesses?
140
INDEXED REVENUE GROWTH
135
130
125
120
Under the first strategy, In the second strategy, 115
Innovation for Longevity, Innovation for Balance, 110
mature portfolio companies companies channel innovation 105
funnel majority of innovation investments across their 100
investments into their legacy portfolio—legacy, growth 95
2013 2014 2015 2016 2017 2018 2019
businesses. In times of and emerging businesses—
crises, the dominant role of in a relatively even manner.
the legacy business can That way, their portfolio is Balanced Portfolio Companies
Mature Portfolio Companies
become a major bottleneck likely to be less fragile when
for large companies, their legacy business is
especially if that part of the unexpectedly disrupted,
business is exposed to such as by the crisis of 2020. Sample: **Mature Portfolio Companies N=215 ***Balanced Portfolio Companies: N=72
declining, or volatile market Our research also indicates *Normalized revenues for 2013-2019 were obtained by first adding the revenues of all
companies in the respective cluster, and then equating the sum for 2013 to 100.
demand (e.g., airlines that that Asia Pacific companies
** Mature Portfolio Companies are those that generate >= 50% of total revenue from their legacy businesses.
have grounded their fleets in that innovate for balance have *** Balanced Portfolio Companies are those that generate more than 50% of their revenues from growth and emerging
2020). been more resilient in recent businesses.
years in terms of revenue Sources: Accenture Portfolio Innovation Survey, 2019, S&P Capital IQ, Accenture Research Analysis
growth (Figure 4).
THE FUTURE OF INNOVATION IN ASIA PACIFIC 15The performance advantage of FIGURE 5
balanced portfolio companies Balanced portfolio companies apply innovation more evenly across their
could possibly be explained by business portfolio while mature portfolio companies double down on
their innovation choices (Figure 5). innovation in their legacy business
% of respondents that applied each type of innovation to a “Large extent” or “Very large extent” in “2019”
These companies have not hesitated to (Asia Pacific)
apply non-incremental (breakthrough and
disruptive) innovation in newer businesses. 17% 19%
14%
Emerging
What is more, balanced portfolio 42% 40% 38%
BUSINESS MATURITY LEVEL
companies in Asia Pacific spend 1.6x times
more on innovation overall, compared to
mature portfolio companies. We argue that
25% 24% 30%
balanced portfolio companies in today’s Growth
environment, where external disruption is 35% 38% 38%
brutal can use these innovation lessons and
investments more readily to activate new
opportunities for growth. 66% 59% 57%
Legacy
38% 36% 42%
Incremental Breakthrough Disruptive
INNOVATION TYPE
Mature Portfolio Balanced Portfolio
Sample: 287 companies from Asia Pacific. Mature Portfolio Companies N=215; Balanced Portfolio Companies: N=72
Mature Portfolio Companies are those that generate >=50% of total revenue from their legacy businesses. Balanced Portfolio
Companies are those that generate more than 50% of their revenues from growth and emerging businesses.
Source: Accenture Portfolio Innovation Survey, 2019
THE FUTURE OF INNOVATION IN ASIA PACIFIC 16COMMONWEALTH SERUM CSL operates as one integrated global
research and development organization that
CSL is putting innovation where it truly
matters – as of April 2020 CSL Behring
LABORATORIES assembles global project teams, drawing (subsidiary of CSL Limited) has become a part
is a global biotechnology leader from together staff from different countries of an industry alliance with other leading
Australia, with market capitalization depending on their expertise. Its team of over pharmaceutical companies to develop a
of $90 billion.9 Its subsidiary - CSL 1,700 research and development experts is potential plasma-derived therapy for treating
dedicated to developing and delivering new COVID-19.13 CSL is also working closely with
Plasma - is one of the world’s largest
therapies to solve unmet medical needs. For University of Queensland by lending its
collectors of human plasma with the year ending June 2019, CSL invested technical expertise and Seqirus vaccine to
more than 230 collection centers in US$832 million (~10 percent of revenue) in bolster the efforts to develop an inoculation
U.S., Europe and China.10 R&D efforts across businesses and around for coronavirus (COVID-19).14
US$3.3 billion in the last five years.11 Notably,
CSL directs ~70 percent of its investments to
new product and market development.12
THE FUTURE OF INNOVATION IN ASIA PACIFIC 17When Innovating for Longevity, our research indicates
that mature portfolio companies plan to double down on
their innovation efforts to further strengthen their legacy
business that is the key generator of cash flows.
However, in times of crises, mature portfolio companies
should not miss the opportunity to innovate for the upturn
by directing sufficient resources to their newer businesses
with strong future potential.
THE FUTURE OF INNOVATION IN ASIA PACIFIC 18GEELY AUTO GROUP Geely attaches great importance to
innovation in pursuit of more sustainable
Amidst the COVID-19 outbreak, Geely Auto is
innovating quickly, by offering “contactless”
is a leading automobile manufacturer manufacturing technologies. For instance, to vehicle purchasing.18 In the first week (Feb
based in Hangzhou, China. The keep abreast with the connected cars trend, 10- Feb 16) the service was made available,
company has expanded rapidly, Geely, Qualcomm and Gosuncn have the online orders increased more than fivefold
including its notable acquisition of partnered to launch 5G/C-V2X-support compared with the same period a year earlier.
vehicles in 2021.16 Sales leads from Geely’s website soared 75x.
Volvo Cars in 2010. But Geely is not
only focusing on getting bigger; it is The financial success is commendable:
focusing on getting better across its between 2009 and 2019 Geely averaged a
10-year compound annual growth rate (CAGR)
portfolio of businesses. For instance, of 15 percent in sales volume and 27 percent
the group in 2019 launched new of cash dividend per share.17
electric car brand – Geometry; under
this brand, Geely plans to introduce
more than 10 pure electric models in
multiple segments by 2025. The
longer-range version of the model
has an ability to travel up to 500
kilometers on a single charge.15
THE FUTURE OF INNOVATION IN ASIA PACIFIC 19Get ready to
FIGURE 6
Innovation was not governed extensively by Asia
govern
Pacific companies prior to the crisis
INNOVATION GOVERNANCE BASED ON ADOPTION OF RITUALS*
innovation
% of respondents (Asia Pacific)
more
Extensive innovation governance:
9% 69% adoption of 6–12 rituals*
Selective innovation governance:
adoption ofRemarkably, the small number of FIGURE 7
companies that adopted six or more Extensive innovation governance helps reduce revenue decline
rituals already, which we describe as during the time of crisis
“extensive innovation governance,”
EXPECTED REVENUE IMPACT AND COMMITMENT TO INNOVATION GOVERNANCE
are expected to be less impacted by
Revenue growth (y-o-y): 2020 (consensus estimates) over 2019 (Asia Pacific companies)
COVID-19 crisis. Their revenue decline
during the COVID-19 crisis is not
expected to be as devastating when Companies governing -2.6%
compared to companies that governed innovation extensively*
2.6x
innovation haphazardly in 2019 Other companies** -6.7%
(Figure 7).
Note * Extensive innovation governance: adoption of 6-12 rituals (21 companies remain in this group in the future);
**Others: adoption ofThe chief strategy and chief innovation officers need to identify the right
governance rituals to ensure the company’s innovation investments can
achieve the desired growth across its portfolio of businesses. The core
governance rituals that best support innovation in the next five years will
depend on the expected future portfolio mix. In other words, governance
priorities help companies allocate innovation resources in places where
opportunities are most promising (Figure 8).
FIGURE 8
Top innovation governance rituals based on future
portfolio mix (Asia Pacific)
FUTURE PORTFOLIO MIX
Balanced
(innovate
for balance)
Mature
(innovate
for longevity)
Put innovation Actively Actively build a Everyone A diverse team I dentify Experimentation xperimentation
E Experiments cale with
S Scale with cale through
S
at the center of communicate culture of generates of experts disruptive investments are investments are are conducted technology talent partners an innovation
corporate the innovation innovation ideas to generates ideas with the made as part of funded by an partners lab/digital
strategy agenda improve ideas for brand help of tech the budgeting gradually innovation lab/ factory
existing new offerings partners lifecycle digital factory
offerings
INSPIRATION IDEATION EXPERIMENTATION SCALING
Note: Largest two gaps between current and expected future adoption of innovation governance rituals
Source: Accenture Portfolio Innovation Survey, 2019
THE FUTURE OF INNOVATION IN ASIA PACIFIC 22The future balanced portfolio FIGURE 9
companies expect to focus their Two innovation governance rituals stand out for future*
governance priorities on building a balanced portfolio companies governing extensively in
culture of innovation and scaling with Asia Pacific
technology partners (Figure 9). % of respondents who adopt innovation governance rituals to a “Large
extent” or “Very large extent”
Actively build a culture 18%
of innovation
69%
Adoption in
2019
Scale with 19% Adoption in
next 5 years
technology partners
66%
Sample N=103.
Note: *Future Balanced Portfolio Companies are those that expect to generate more than 50% of their
revenues from growth and emerging businesses.
Source: Accenture Portfolio Innovation Survey, 2019
THE FUTURE OF INNOVATION IN ASIA PACIFIC 23TDK, a multinational Japanese Another important factor that has
helped TDK thrive is that it applies
TDK recognized that the technology will
be necessary to enhance the added value
electronics company has built a innovation based on the specific needs of the rechargeable battery business in
culture of innovation starting with of a geography; for instance, R&D the future and it plans to commercialize
its top leadership to ensure that focused on mobile phone and natural StoreDot’s fast charging technology with
innovation happens across the globe. energy in Europe, next-gen application this agreement.21
and high efficiency mass production
TDK has focused on strengthening Between March 2010 and March 2019, the
technology in Japan, smart grid related
and diversifying its leadership, as products in America.20
company has registered a compounded
reflected in the number of directors annual growth rate (CAGR) of 6.4% in
TDK is also active in partnering with revenue, and it has expanded its
and board members outside of Japan the technology start-ups. In 2018, operating margin by more than double
(which has increased to 5 in 2018 TDK entered into a joint development over the same period.22
from 1 in 2002). 19 agreement with StoreDot Ltd., an Israeli
startup that excels in fast charging
technology for lithium-ion batteries.
The fast charging flash battery
technology makes it possible to
charge a smartphone in approximately
five minutes.
THE FUTURE OF INNOVATION IN ASIA PACIFIC 24Future mature portfolio companies FIGURE 10
innovating for longevity need to rethink Two innovation governance rituals stand out for future* mature
how they generate new ideas to improve portfolio companies governing extensively in Asia Pacific
existing offerings; and how to scale with % of respondents who adopt innovation governance rituals to a “Large
talent partners (Figure 10). extent” or “Very large extent”
Everyone generates 15%
ideas to improve existing
offerings 59% Adoption in
2019
Adoption in
next 5 years
Scale with talent 10%
partners
55%
Sample N=184.
Note: *Future Mature Portfolio Companies are those that expect to generate >=50% of total revenue from
their legacy businesses.
Source: Accenture Portfolio Innovation Survey, 2019
THE FUTURE OF INNOVATION IN ASIA PACIFIC 25Japan’s FAST RETAILING, Fast Retailing CEO Tadashi Yanai in late
2017 highlighted that “In the apparel
Attracting the best talent does not
stop with its supply chain: in 2018,
which has market industry, one company cannot dominate Fast Retailing took a minority stake in
capitalization of over $59 the world and it is necessary to grow Lemaire, a brand established in France by
billion23 has recognized the together with partners.”25 Christophe Lemaire and Sarah-Linh Tran
to tap into the talent of Mr. Lemaire and
importance of partnerships in To overhaul its supply chain, the company his experience as a designer.27 That way,
its scaling efforts. Among has partnered with logistics company the company can continue to command
other brands, the group Daifuku which has helped transform Fast
Retailing’s flagship warehouse in Tokyo
its position as one of the world’s leading
manufacturers and retailers of private-
operates more than 2,000 into a 24-hour operation, largely reliant label apparel.
Uniqlo stores in over 20 on robots.
countries and expects to In 2019, the company added two new
expand into India and Italy.24 partners Mujin Inc, and Exotec Solutions
SAS, to expand its alliance with Daifuku.
As part of the partnership, Fast Retailing
will build an unparalleled supply chain by
expanding alliances with companies that
have advanced technologies, while
recruiting experts to spearhead supply
chain reforms.26
THE FUTURE OF INNOVATION IN ASIA PACIFIC 26Blend well for best results
It takes the right mix of innovation and governance
When leaders align their future Toyota president Akio Toyoda describes Innovation is seen as a
innovation investment strategy to Woven City as an opportunity for the creative force that cannot
the desired portfolio mix, they gain company to test autonomous technology
the power to turn innovation into a real and smart city infrastructure.
be controlled, but in reality
advantage. Doing so can require what a systematic approach to
Toyota, along with the architect
seems like dramatic steps. managing innovation is key
BIG (Bjarke Ingels Group) from Denmark,
Take for example Toyota’s Woven City, will prototype new ways for technological to greater financial impact.
a prototype city of the future where assistance to augment daily life, no Leading companies recognize
people, buildings and vehicles are matter where you might be in that to sustain strong growth
connected through sensors and data. Woven City. they need to stay committed
This fully connected ecosystem will allow
Ingels highlights in-home robotics and to governing innovation
scientists and researchers to test an array
of new technologies, including artificial
sensor-based AI that will automatically extensively.
restock the fridge, take out the trash,
intelligence, human mobility, robotics, Are you ready to improve
and check the health of the homeowner.
materials science, sustainable energy, your innovation governance
Woven city is scheduled to break ground
in one controlled environment. discipline?
near Mt. Fuji, Japan, in 2021.28
THE FUTURE OF INNOVATION IN ASIA PACIFIC 27About the research
In order to better understand how portfolio companies approach innovation, how they allocate innovation investments across
different businesses and how they manage those investments, we structured our research in three phases:
1 Exploratory interviews 2 Senior management 3 Financial analysis
First, we conducted twenty in-depth innovation survey Finally, we sourced and analyzed
interviews with experts in the We conducted an extensive financial data for the surveyed
corporate, non-corporate and phone-based survey with 287 companies (i.e., revenue growth); we
academic arenas, across various respondents in senior positions in explored and tested relationships
regions and industries, to better Innovation, R&D, Strategy, Marketing between innovation type adoption
understand the contemporary and Operations (see Figure 11). Each and expected business performance
perspectives on innovation. respondent represented a company at in Asia Pacific.
or larger than $1 billion USD in annual
revenues. The companies were based
in 4 geographic markets – India, China,
Japan and Australia.
As part of the innovation survey, we
examined governance trends across
four stages of innovation (see page 29).
THE FUTURE OF INNOVATION IN ASIA PACIFIC 28Governance trends across four stages of innovation
Inspiration Ideation Experimentation Scaling
1. Put innovation at the center of 4. Everyone generates ideas to 7. Experimentation investments are 10. Scale with technology partners
corporate strategy improve existing offerings made as part of the budgeting
My company actively engages with
lifecycle
Our c-suite puts innovation at the Everyone is responsible for partners across our ecosystem to
centre of our corporate strategy (i.e. generating ideas to improve existing My company makes investment get access to the required
Innovation agenda features offerings. Especially employees decisions for experimentation with technologies to help us scale the
prominently in our annual reports, on interacting with customers regularly ideas that rely heavily on new most promising ideas faster.
the website etc.). (e.g., Customer service officers) are technologies formally, as part of the
11. Scale with talent partners
required to systematically generate budgeting cycle.
2. Actively communicate the
and communicate ideas. My company actively engages with
innovation agenda 8. Experimentation investments are
partners across our ecosystem to
5. A diverse team of experts generates funded gradually
Our c-suite actively communicates get access to specialised talent and
ideas for brand new offerings
the innovation agenda with a high To allocate investment for expertise to help us scale the most
degree of transparency to everyone A diverse team of experts, for experimentation my company promising ideas faster.
within our entire organisation and to example technologists, engineers or releases seed funding initially, and
12. Scale through an innovation lab/
the investor community. designers assembled from different then increases over time based on
digital factory
areas of the business, and refreshed the results from experiments (e.g.,
3. Actively build a culture of
on a regular basis, is responsible for Pilot testing of a minimum viable A specialized organizational entity
innovation
generating ideas for brand new product). such as an ‘innovation lab’ or a
Our c-suite actively builds a culture offerings. ‘digital factory’ is responsible for
9. Experiments are conducted by an
that is required to drive innovation scaling ideas that rely heavily on
6. Identify disruptive ideas with the innovation lab/digital factory
(e.g., By increasing workforce new technologies.
help of tech partners
diversity, hiring of entrepreneurs My company manages
etc.). To identify potentially disruptive experimentation with ideas that rely
ideas, we collaborate with heavily on new technologies through
companies that are at the frontier of a specialized organizational entity,
new technologies, for example which serves the needs of all
artificial intelligence start-ups or business units (e.g., An ‘innovation
well-known technology firms globally lab’ or ‘digital factory’).
or within our industry.
THE FUTURE OF INNOVATION IN ASIA PACIFIC 29FIGURE 11
Portfolio innovation survey – Asia Pacific
287 respondents from senior positions in Innovation, R&D, Strategy, Marketing and Operations
Organizational level Annual revenues
C Suite 23% US$1-9 Billion 58%
Vice President US$10-29 Billion 23%
/Director 24%
US$30-49 Billion 9%
Senior Manager 54%
US$50 Billion or more 9%
Functional area Number of people
Innovation 6% 501 - 1,000 1%
Research & 1,001 - 5,000 14%
Development
5%
5,001 - 10,000 19%
Strategy 22%
10,001 - 25,000 29%
Marketing 25%
25,001 - 50,000 15%
Operations 41% 50,001 - 100,000 8%
More than 100,000 14%
THE FUTURE OF INNOVATION IN ASIA PACIFIC 30References
1
United Nations World Population Prospects 2019 16
AutoTechInsight – Geely Partners with Qualcomm, Gosuncn
2
Asia Unicorns: A List to Watch 17
Geely – Annual Results 2019
3
CN Traveler – Louis Vuitton has Opened its First Restaurant in Osaka 18
Geely – Geely Auto Launches Full Online Car Buying and Home Delivery Service
4
Asian Scientist – Asia’s Scientific Trailblazers: Eugene Fitzgerald 19
TDK – Annual Report 2018
5
Accenture Research - Interview with Professor Eugene Fitzgerald, SMART 20
TDK – Four-Base System to Carry out Research and Development
February 2020 21
TDK – Announcement of Strategic Partnership to Further Accelerate TDK’s Global
6
Livemint – 3 Years After Launch, Jio Becomes No.1 Telco by User Base, Revenue R&D Activities
7
Hindustan Times – How Reliance’s Jio Platforms Snapped 10 Deals in 2 Months 22
TDK – Annual Report 2019
8
Accenture Research - Interview with Kiran Mazumdar-Shaw, Biocon March 2020 23
Fast Retailing – S&P Capital IQ – Market Capitalization as on 17th June 2020 in USD
9
CSL – S&P Capital IQ – Market Capitalization as on 17th June 2020 in USD 24
Financial Times – Fast Retailing: Fit for the Future
10
CSL Plasma – About Us 25
Financial Times – Fast Retailing: Fit for the Future
11
CSL – Annual Report 2019 26
Fibre2fashion – Fast Retailing Expands Partnership with Mujin & Exotec
12
CSL – Research and Development 27
Fast Retailing – Fast Retailing Announces New Phase of Partnership with LEMAIRE
13
CSL – CSL’s Global Role in Battling COVID-19 28
Fastcompany – Toyota’s New ‘Prototype Town’
14
The Sydney Morning Herald – ‘Too Early to Relax’: CSL Top Scientist Warns on
Coronavirus
15
Reuters – China’s Geely Launches New Electric Car Brand ‘Geometry’
THE FUTURE OF INNOVATION IN ASIA PACIFIC 31About Accenture About Accenture Research
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