Here’s a paradox. Companies have never placed a higher priority on innovation—yet they have never been as unready to deliver on their innovation aspirations. It’s a recipe for disappointment. BCG’s 2024 Most Innovative Companies report examines the readiness gap and offers perspectives on how companies can get back on track.
A Troubling Innovation Readiness Gap
BCG first discussed the readiness gap in their 2021 Most Innovative Companies report. At the time, 20% of companies scored as “ready” based on BCG’s proprietary Innovation-to-Impact benchmark—despite 75% ranking innovation a top-three priority. Today, the 2024 research finds 83% of companies seeing innovation as a top-three priority, but only 3% ready to translate their priorities to results.
On readiness, 2024’s top-quartile innovator underperforms 2022’s median innovator. It’s a call for urgent action.
Combating Zombies with Strategy
Readiness has declined most sharply in those aspects of the innovation system that link business strategy to innovation strategy. And executives feel it: just 12% say their company has a strong link between the two. However, innovation activity—the number of projects going through the funnel—has remained steady, evoking a troubling image: “zombie” innovation systems just going through the motions.
A strong link to business strategy focuses innovation investment—and it also delivers better innovation output. Strategy-led innovators achieve a share of revenue from new products 74% higher than companies with just a weak link between strategy and innovation. It’s time for innovators to recommit to strategy.
GenAI as an Innovation Accelerator
And GenAI can be a powerful tool in helping organizations reshape their innovation systems for greater readiness. BCG spotlights ten use cases that span the three phases of the innovation cycle: strategize, create, and scale.
