1. Booz & Company
October 22, 2013
Navigating the Digital Future
The 2013 Global Innovation 1000 Study

2. Introduction
R&D Spending Trends Analysis
Digital Enablers across the Innovation Value Chain
Booz & Company
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact
Pack.pptx
1

3. In 2013, Booz & Company is publishing its 9th Global Innovation
1000 study focusing on the impact of Digital Enablers
Previous Global Innovation 1000 Studies
2013: Navigating the Digital
Future
2005:
Money Isn't
Everything
2006:
Smart Spenders
2007:
The Customer
Connection
2009:
Profits Down,
Spending Steady
2010:
How Top Innovators
Keep Winning
2011:
Why Culture
is Key
Booz & Company
2008:
Beyond Borders
2012:
Making Ideas
Work
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact Pack.pptx
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4. Over the years, our study has become a recognized contributor to
better understanding what drives innovation success
Selected Media Coverage Highlights
 Covered by ABCNews and MSNBC television
 Featured on NPR radio in US and BBC Radio in UK
 Cited in over 180 publications across 27 countries
 Called “The most comprehensive assessment of the
relationship between R&D investment and corporate
performance” by The Economist
Representative Publications
Booz & Company
Furthering the Innovation Dialogue
2005
 Initiated study to better understand how organizations can maximize their
return on innovation investment
 Found no statistical relationship between R&D spending and success
2006
 Defined “High Leverage Innovators” who produced
better results per R&D dollar than industry peers
 Awarded “2006 Special Achievement Award
for Advancing Innovation” by Innovate Forum
2007
 Identified and defined three innovation strategies (i.e. need seekers,
market readers, and tech drivers)
 Examined the connection between performance and and alignment of
corporate and innovation strategies
2008
 Identified characteristics of global innovation networks (i.e. R&D
footprint) that correlated with higher performance
 Awarded “Best of Visions” award from PDMA
2009
 Reported impact of 2008-09 global recession on R&D spending
2010
 Identified the critical capabilities required for successful innovation and
their relationship to corporate performance
2011
 Examined the links between business strategy, innovation strategy and
culture
2012
 Examined the early stages of innovation, i.e. generating ideas and
converting them into actionable projects
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact Pack.pptx
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5. This year’s study, in addition to our annual R&D spend analysis,
focuses on “digital enablers” across the innovation value chain
2013 Global Innovation 1000 Study
Digital Enablers across the
Innovation Value Chain
R&D Spending Trends
 Analysis of R&D spending
 Understanding application of digital enablers
 Annual R&D spending across the 1000 largest
R&D spenders globally (publicly-traded firms)
 Usage of large set of digital enablers across the
innovation value chain
 R&D spending by region and industry (absolute
spending, growth and proportion of total)
 Effectiveness of digital enablers and impact on
performance
 R&D intensity (spending as percent of revenue)
 R&D spending on digital enablers
 Top 20 R&D spenders globally
 Success factors for leveraging digital enablers
 10 Most Innovative Companies
 Usage of digital enablers by innovation strategy
 Methodology
 Methodology
 Spending determined based on companies‘
annual reports from their most recent fiscal year,
as of June 30, 2013
 “Most Innovative Companies” determined based
on web-based survey of nearly 400 senior
managers and R&D professionals
Booz & Company
 Web-based survey of nearly 400 senior
managers and R&D professionals to understand
impact of digital enablers on innovation results
(productivity, innovations outcomes, etc.)
 Interviews with clients and a subset of survey
respondents
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact Pack.pptx
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6. Introduction
R&D Spending Trends Analysis
Digital Enablers across the Innovation Value Chain
Booz & Company
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact
Pack.pptx
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7. Executive Summary – 2013 R&D Spending Trends
 After two consecutive years of 9%+ growth, global R&D spending returned to the long-term
growth trend and grew at 5.8% in 2013 to the highest total ever, $638 billion
 The top three industries by R&D spending continue to be Computing & Electronics, Health, and
Auto
 The Software & Internet, Health, and Auto sectors accounted for 74% of the overall growth in
spending; Chemicals & Energy decreased its R&D expenditures
 Spending in North America grew at an above average rate of 8.6% while Europe grew at a below
average rate of 4.5%; Japan reduced its R&D spending by 3.6%
 China increased R&D spending at the highest rate, 35.8%, but deceleration of R&D growth in
China compared to previous years is significant (5-year annualized growth rate of ~ 64%)
 Tesla Motors and Facebook are new entrants on the 10 Most Innovative Companies list, and
Samsung rose in the ranking for the fourth straight year, reaching third place
 For the fourth year in a row, the 10 Most Innovative Companies outperformed the Top 10 R&D
spenders across key financial metrics – revenue growth, EBITDA margin, and market cap growth
Sources: Bloomberg data; Capital IQ data; Booz & Company Innovation 1000 articles in strategy + business; Booz & Company analysis
Booz & Company
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact Pack.pptx
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8. R&D spending grew 5.8% in 2013, to its highest level ever—but
this is a slower growth rate than the two prior years of 9%+ growth
Global Innovation 1000 R&D Spending
2002–2013; $ Billions
$638
$603
11-year CAGR
5.53%
= 5.5%
$495
$450
$353
$355
$369
2002
2003
2004
1-year
CAGR
0.6%
3.7%
2007
2009
$550
$503
$417
$391
2005
6.2%
$521
2006
6.5%
7.9%
10.0%
2008
5.4%
2010
-3.5%
2011
9.3%
2012
9.6%
2013
5.8%
Sources: Bloomberg data; Capital IQ data; Booz & Company Innovation 1000 articles in strategy + business; Booz & Company analysis
Booz & Company
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact Pack.pptx
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9. The three industries that spend the most on R&D continue to be
Computing & Electronics, Healthcare, and Automotive
2012 R&D Spending by Industry
2013 R&D Spending by Industry
$603 Billions
$638 Billions
Telecom Other
Consumer
Aerospace
2%
3%
& Defense
4%
2%
Software &
Internet 7%
Computing
& Electronics
28%
Other
Computing
& Electronics
27%
Software &
Internet 8%
Chemicals
& Energy 7%
Industrials
Aerospace Telecom
& Defense
Consumer
2%
3%
Chemicals
3%
2%
& Energy
6%
10%
Industrials
10%
22%
21%
16%
16%
Healthcare
Automotive
Healthcare
Automotive
Sources: Bloomberg data; Capital IQ data; Booz & Company Innovation 1000 articles in strategy + business; Booz & Company analysis
Booz & Company
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact Pack.pptx
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10. Nearly three-quarters of the $35B spending growth in 2013 came
from the Software & Internet, Healthcare, and Automotive sectors
Change in R&D
Spending
($ Billions)
38
36
34
32
Decreases
Change in 2012-2013 R&D Spending by Industry
While Computing & Electronics is
the largest spender, Software &
Internet experienced the largest
absolute spending increase
0.8
0.7
Increases
0.1
-2.0
34.8
2.6
3.4
30
28
3.4
26
Chemicals & Energy was
the only sector to
decrease its R&D
spending this year
24
7.4
22
20
18
16
14
Represents 74%
of growth in
R&D spending
9.2
12
10
8
6
9.3
4
2
0
Software
& Internet
Healthcare
Automotive
Industrials
Computing
& Electronics
Telecom
Consumer
Other
Aerospace
& Defense
Chemicals
& Energy
Total
Sources: Bloomberg data; Capital IQ data; Booz & Company Innovation 1000 articles in strategy + business; Booz & Company analysis
Booz & Company
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact Pack.pptx
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11. The Software & Internet industry increased its R&D spending at a
higher rate than any other industry
Change in R&D Spending by Industry
2012–2013
25
22.1%
21.1%
20
15
10
7.8%
7.1%
Weighted
Average
6.9%
5.4%
5
5.8%
3.7%
2.0%
0.5%
0
-5
-4.8%
Software &
Internet
Telecom
Automotive Healthcare
Other
Industrials Consumer Computing Aerospace Chemicals
&
&
&
Electronics Defense
Energy
Sources: Bloomberg data; Capital IQ data; Booz & Company Innovation 1000 articles in strategy + business; Booz & Company analysis
Booz & Company
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact Pack.pptx
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12. China continues to increase its R&D spending at a higher rate than
Rest of World (ROW), North America, Europe, and Japan
Change in R&D Spending by Region
1-Year
Growth Rate (%)
2012–2013
40
R&D Spending by Region
2008 - 2013
45
2013 R&D Spending
($ Billions)
40
248,469.3
35.8%
35
189,136.9
30
135,681.4
35
China
43,949.9
25
20
20
20,526.2
17.5%
North
America
15
15
Weighted
Average
8.6%
10
4.5%
5
5.8%
0
ROW
10
5
Europe
0
-5
-3.6%
Japan
-5
China
ROW
North
America
Europe
Japan
0
5
10
15
65
5-Year CAGR (%)
Sources: Bloomberg data; Capital IQ data; Booz & Company Innovation 1000 articles in strategy + business; Booz & Company analysis
Booz & Company
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact Pack.pptx
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13. China has steadily gained revenue share among the Innovation
1000 companies – but is gaining R&D share at an even faster rate
Revenue and R&D Spending by Region: 2008-2013
0.4%
4.9% 5.8%
China’s R&D share has nearly
increased by 8X since 2008
21.5%
1.4%
2.1%
2.5%
5.2% 3.3%
9.2%
5.3% 4.6%
9.9%
6.1% 6.6%
6.2% 7.6%
3.2%
8.7%
6.9%
11.9%
10.8%
21.7%
10.2%
0.8%
22.6%
10.8%
19.9%
20.5%
29.7%
23.3%
23.3%
21.2%
20.1%
21.1%
31.9%
32.3%
36.7%
34.4%
30.2%
35.3%
21.3%
19.1%
34.2%
32.9%
China
29.7%
30.0%
ROW
34.3%
Japan
Europe
North America
43.5%
40.4%
29.1%
R&D Revenue
2008 2008
31.0%
R&D Revenue
2009 2009
38.5%
38.3%
29.0%
R&D Revenue
2010 2010
39.0%
37.9%
27.4%
R&D Revenue
2011 2011
27.3%
R&D Revenue
2012 2012
27.1%
R&D Revenue
2013 2013
Sources: Bloomberg data; Capital IQ data; Booz & Company Innovation 1000 articles in strategy + business; Booz & Company analysis
Booz & Company
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact Pack.pptx
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14. Given strong R&D spending increase combined with very modest
revenue increase, R&D intensity has increased significantly
R&D Spending and Revenue CAGR1)
R&D Intensity2)
2008-2013
2008-2013
Intensity (%)
CAGR (%)
3.80
3.73%
20
Revenue CAGR
R&D Spending CAGR
15
15%
3.60%
3.60
10%
10
8%
6% 5%
3.52%
7%
3.42%
5%
5
2008
2009
3.43%
3.42%
3.40
0.2%
0
-4%
-5
3.20
-10
-11%
-15
08-09
09-10
10-11
11-12
12-13
3.00
2010
2011
2012
2013
1)
Innovation 2013 yearly R&D spending comparison for the 911 companies for which R&D spending available for 2012 and 2013
2)
R&D intensity is the share of revenue spent on R&D
Sources: Bloomberg data; Capital IQ data; Booz & Company Innovation 1000 articles in strategy + business; Booz & Company analysis
Booz & Company
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact Pack.pptx
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15. Overall R&D spending grew at a higher rate than revenue and
increased R&D intensity
Indexed to 1998
R&D, Revenue, and Intensity
Indexed to 1998
3.2
R&D Spending
3.0
2.8
Revenue
2.6
2.4
2.2
2.0
1.8
1.6
1.35
1.4
1.2
1.19
1.05
1.00
1.22
1.23
1.22
1.20
1.23
1.14
1.12
1.13
1.11
1.16
1.13
1.18 R&D Spending
as % of Revenue
1.0
0.8
0.6
0.4
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Sources: Bloomberg data; Capital IQ data; Booz & Company Innovation 1000 articles strategy + business; Booz & Company analysis
Booz & Company
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact Pack.pptx
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16. Google (#12) & Sony (#20) are new Top 20 R&D spenders in 2013
2012 Top 20 R&D Spending Ranking
Increase or decrease within Top 20
ranking compared to 2012
2013 Top 20 R&D Spending Ranking*
Rank
Company
Geography
Industry
2012 R&D
spending
($B)
Rank
Company
Geography
Industry
2013 R&D
spending
($B)
1
Toyota Motor Corp
Japan
Auto
9.9
1
Volkswagen
Europe
Auto
11.4
2
Novartis AG
Europe
Health
9.6
2
Samsung
ROW
Computing & Electronics
10.4
3
Roche Holding AG
Europe
Health
9.4
3
Roche Holding AG
Europe
Health
10.2
4
Pfizer Inc
N. America
Health
9.1
4
Intel Corp
North America
Computing & Electronics
10.1
5
Microsoft Corp
N. America
Software & Internet
9.0
5
Microsoft Corp
North America
Software & Internet
9.8
6
Samsung
ROW
Computing & Electronics
9.0
6
Toyota Motor Corp
Japan
Auto
9.8
7
Merck & Co Inc
N. America
Health
8.5
7
Novartis AG
Europe
Health
9.3
8
Intel Corp
N. America
Computing & Electronics
8.4
8
Merck & Co Inc
North America
Health
8.2
9
General Motors Co
N. America
Auto
8.1
9
Pfizer Inc
North America
Health
7.9
10
Nokia OYJ
Europe
Computing & Electronics
7.8
10
Johnson & Johnson
North America
Health
7.7
11
Volkswagen AG
Europe
Auto
7.7
11
General Motors Co
North America
Auto
7.4
12
Johnson & Johnson
N. America
Health
7.5
12
Google Inc
North America
Software & Internet
6.8
13
Sanofi
Europe
Health
6.7
13
Honda Motor Co
Japan
Auto
6.8
14
Panasonic Corp
Japan
Computing & Electronics
6.6
14
Daimler AG
Europe
Auto
6.6
15
Honda Motor Co
Japan
Auto
6.6
15
Sanofi
Europe
Health
6.3
16
GlaxoSmithKline
Europe
Health
6.3
16
IBM
North America
Computing &Electronics
6.3
17
IBM
N. America
Computing & Electronics
6.3
17
GlaxoSmithKline
Europe
Health
6.3
18
Cisco Systems Inc
N. America
Computing & Electronics
5.8
18
Nokia OYJ
Europe
Computing & Electronics
6.1
19
Daimler AG
Europe
Auto
5.8
19
Panasonic Corp
Japan
Computing & Electronics
6.1
20
AstraZeneca PLC
Europe
Health
5.5
20
Sony Corp
Japan
Computing & Electronics
5.7
NEW
NEW
Cisco Systems Inc moved to #24
Total
$153.6
AstraZeneca PLC moved to #26
Sources: Bloomberg data; Capital IQ data; Booz & Company Innovation 1000 articles in strategy + business; Booz & Company analysis
Booz & Company
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact Pack.pptx
*Note: The methodology for calculating R&D spending changed this year, so some rankings are a result of methodology change rather than actual spending change.
Total
$159.2
15

17. Tesla Motors is a new entrant among the 10 Most Innovative
Companies, Facebook rejoined the list
10 Most Innovative Companies
2013
Rank
Company
2013 R&D
Spending
($M)
Overall
Spending
Rank
Industry
Spending
Rank
2013
Revenue
($M)
Spending as % of
Revenue
(Intensity)
1
Apple Inc
$3,381
43
14
$156,508
2.2%
2
Google Inc
$6,793
12
2
$50,175
13.5%
3
Samsung
$10,447
2
1
$178,621
5.8%
4
Amazon.com Inc
$4,564
30
4
$61,093
7.5%
5
3M Corp
$1,634
85
7
$29,904
5.5%
6
General Electric Co
$4,520
31
2
$144,796
3.1%
7
Microsoft Corp
$9,811
5
1
$73,723
13.3%
8
Intl Business Machines Corp
$6,302
16
3
$104,507
6.0%
9
Tesla Motors Inc
NEW
$274
377
45
$413
66.3%
10
Facebook Inc
NEW
$1,399
101
7
$5,089
27.5%
Procter & Gamble moved to 13th; Toyota moved to 16th
Sources: Bloomberg data; Capital IQ data; Booz & Company Innovation 1000 articles in strategy + business; Booz & Company analysis
Booz & Company
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact Pack.pptx
Increase or decrease within “Most
Innovative” ranking compared to 2012
16

18. Samsung rose in the rankings for the fourth straight year,
displacing 3M as the 3rd most innovative
Change in the 10 Most Innovative Companies Ranking
2010-2013
2010
2011
2012
2013
1st
2nd
3rd
4th
5th
6th
7th
8th
9th
10th
Sources: Bloomberg data; Capital IQ data; Booz & Company Innovation 1000 articles in strategy + business; Booz & Company analysis
Booz & Company
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact Pack.pptx
17

19. As in previous years, there are significant differences between the
10 Most Innovative Companies and the Top 10 R&D spenders
2013 Top 10 R&D Spending Ranking
2013 10 Most Innovative Companies
Rank
Company
2013 R&D
Spending
($B)
Spending
Rank
R&D/
Revenue
(Intensity)
Industry
Rank
Company
2013 R&D
Spending
($B)
Region
R&D/
Revenue
(Intensity)
Industry
1
Apple Inc
$3.4
43
2.2%
Computing &
Electronics
1
Volkswagen
$11.4
Europe
4.6%
Auto
2
Google Inc
$6.8
12
13.5%
Software &
Internet
2
Samsung
$10.4
ROW
5.8%
Computing &
Electronics
3
Samsung
$10.4
2
5.8%
Computing &
Electronics
3
Roche Holding
AG
$10.2
Europe
21.0%
Health
4
Amazon.com
Inc
$4.6
30
7.5%
Software &
Internet
4
Intel Corp
$10.1
N. America
19.0%
Computing &
Electronics
5
3M Corp
$1.6
85
5.5%
Industrials
5
Microsoft Corp
$9.8
N. America
13.3%
Software &
Internet
6
General
Electric Co
$4.5
31
3.1%
Industrials
6
Toyota Motor
Corp
$9.8
Japan
3.7%
Auto
7
Microsoft
Corp
$9.8
5
13.3%
Software &
Internet
7
Novartis AG
$9.3
Europe
16.5%
Health
8
IBM
$6.3
16
6.0%
Computing &
Electronics
8
Merck & Co Inc
$8.2
N. America
17.3%
Health
9
Tesla Motors
Inc
$0.3
377
66.3%
Auto
9
Pfizer Inc
$7.9
N. America
13.3%
Health
10
Facebook Inc
$1.4
101
27.5%
Software &
Internet
10
Johnson &
Johnson
$7.7
N. America
11.4%
Health
Total R&D
Spending
$49.1B
Total R&D
Spending
$94.8B
Companies appearing on both lists
Sources: Bloomberg data; Capital IQ data; Booz & Company Innovation 1000 articles in strategy + business; Booz & Company analysis
Booz & Company
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact Pack.pptx
18

20. Consistent with prior years’ findings, the 10 Most Innovative
Companies outperform the Top 10 Spenders
10 Most Innovative Companies* vs. Top 10 R&D Spenders
10 Most Innovative Companies
Highest
Possible
Score:
 Among the Most Innovative Companies, all
but GE, Microsoft, and Google outperformed
their industries on market cap growth
100%
71% 69%
Normalized
Performance
of Industry 50%
Peers:
Insights
Top 10 R&D Spenders
 The high market cap growth of the Most
Innovative Companies was driven by high
performance from Samsung, Apple, and
Amazon
66%
54%
45%
45%
 Apple, Samsung, and Amazon also saw the
greatest revenue growth among the Most
Innovative Companies
 The Top 10 Spenders lag their industry peers
on revenue and market cap growth
Lowest
Possible
Score:
0%
Revenue Growth
(5-yr. CAGR)
EBITDA as a
% of Revenue
(5-yr. Avg.)
Market Cap
Growth (5yr. CAGR)
 Among the Top 10 Spenders, only
Volkswagen and Samsung outperformed their
industries on all three financial measures
Sources: Bloomberg data; Capital IQ data; Booz & Company Innovation 1000 articles in strategy + business; Booz & Company analysis
Booz & Company
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact Pack.pptx
*Only 8 of the 10 Most Innovative Companies were
included in this analysis. Tesla and Facebook were
removed as they did not have Market Cap data
spanning back 5 years.
19

21. Introduction
R&D Spending Trends Analysis
Digital Enablers across the Innovation Value Chain
Booz & Company
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact
Pack.pptx
20

22. Executive Summary – Survey Findings
 Overall, companies spend an average of 8.1% of their R&D budget on digital enablers; the Software
& Internet, Aerospace & Defense, and Health industries spend the highest proportions
 These tools fall into two categories: “Productivity Enablers“ and “Market and Customer Insight
Enablers”
– Productivity Enablers are commonly used, must-have enablers to establish baseline productivity
– Market and Customer Insight Enablers are emerging enablers focused on understanding market
and customer needs
 Our survey results show that usage and effectiveness of these tools aren’t correlated– some heavily
used Productivity Enablers simply aren’t very effective, while several less used Market and Customer
Insights Enablers turn out to be highly effective
 Only ~26% of digital enablers are used significantly and also considered strongly effective by survey
respondents
 However, companies using enablers significantly are ~77% more likely to report that they outperform
competitors than companies using them moderately
 We found significant differences in terms of usage based on companies’ overall innovation strategy
with Need Seekers claiming highest usage frequency of digital enablers
Sources: Bloomberg data; Capital IQ data; Booz & Company Global Innovation 1000 survey; Booz & Company analysis
Booz & Company
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact Pack.pptx
21

23. Companies use a wide variety of digital Productivity and Market &
Customer Insight enablers across the innovation value chain
Market and
Customer Insight
Enablers
Emerging enablers
focused on
understanding
market and customer
needs
Productivity
Enablers
Commonly used, musthave enablers to
establish baseline
productivity
Sources: Booz & Company Global Innovation 1000 survey; Booz & Company analysis
Booz & Company
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact Pack.pptx
22

24. Among all industries Software & Internet companies spend the
highest proportion of their R&D budgets on digital enablers
Spending on digital enablers, in % of R&D spending and in $B1)
Average weighted by # of responses per % spend category2)
15.0%
12.0%
10.0%
7.7
7.2%
7.1%
6.9%
2.6
5.7%
13.8
0.9
9.7
Computing
& Electronics
6.5
Auto
1.0
Telecom
4.7
Industrials
2.9
Chemicals
& Energy
Consumer
Health
Aerospace
& Defense
Software &
Internet
1.7
Average
8.1%
6.3%
Other
7.9%
8.6%
Total
Spending
1)
Calculated by applying the Average of % Spending (as determined by survey respondents) on the left to the overall industry R&D spending (as calculated from Bloomberg and Capital IQ data)
2)
% spend categories: <5%, 6-10%, 11-20%, 21-30%, 31-40%, 41-50%, and >50%
Sources: Bloomberg data; Capital IQ data; Booz & Company Global Innovation 1000 survey; Booz & Company analysis
Booz & Company
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25. Companies using digital enablers significantly are 77% more likely
to report that they outperform competitors than moderate users
Respondents with perceived overall financial outperformance relative to competitors
(in %)
+77%
53%
30%
Moderate usage of digital enablers
Minimal Usage
Significant usage of digital enablers
1
2
3
4
5
Significant Usage
“Used Moderately” = 1, 2, or 3
“Used Significantly” = 4 or 5
Sources: Booz & Company Global Innovation 1000 survey; Booz & Company analysis
Booz & Company
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26. In 2007 we defined three distinct innovation strategies which we
further explored in subsequent studies
Three Innovation Strategies
Example Companies
Need Seekers – Consistently strive to be first
movers; Proactively engage customers to
determine needs and shape new innovations;
Determine new innovations market back from market
need identification
Market Readers – Adopt a 2nd mover strategy;
Focus on driving value through incremental change;
New innovations determined market back; although
not as proactively as Need Seekers
Technology Drivers – Drive innovation via
technological achievement; Leverage technology
for both incremental and breakthrough change.
The least proactive of the three strategies in directly
contacting customers
Sources: Booz & Company Innovation 1000 articles in strategy + business
Booz & Company
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27. In 2011 we found that Need Seekers possess the highest level of
strategic alignment and cultural support
Innovation Strategy Alignment with
Business Strategy
% of Respondents
Innovation Strategy Supported by
Company Culture
% of Respondents
100%
100%
7.9%
8.4%
Strongly
6.9%
Highly Aligned
14.0%
Supports
30.3%
80%
80%
41.2%
31.2%
32.9%
34.2%
28.5%
60%
60%
33.7%
50.9%
40%
40%
37.7%
34.7%
20%
33.8%
38.8%
20%
19.8%
3.6%
3.0%
4.4%
Need Seeker
Market Reader
Technology Driver
21.3%
17.1%
15.2%
0%
15.8%
Not Aligned
3.6%
0%
0.6%
17.5%
6.9%
6.1%
Market Reader
Does not
Technology Driver
Support
Need Seeker
Sources: Booz & Company 2011 Global Innovation 1000 survey
Booz & Company
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28. In 2012 we found that the innovation models use idea generation
tools and mechanisms at the front end that support their strategies
“Which of the following tools and mechanisms, if any, does your organization
use to generate new ideas?” (1)
Indexed average value across all survey respondents
End-User Insight Tools




1.17
Idea Work-OutEnd User Insight Tools
Sessions
Social Network Data Mining
End User / Customer Focus Groups
Direct Customer Observation
0.92
0.96
Market Insight Sppt
 Feedback from Sales & Customer Tools
 Traditional Market Research
 Seed Funding for Exploratory Research
 Periodic Meetings of Technical
Technology Foresight Tools
Community
 Technology Road Mapping
 External Technology & Idea Scouting
 Cross B.U. Communities of Practice
Market Readers
over-index on
tools/mechanisms
that provide
market insights
and demand leads
0.91
Market Insight Tools
Technology Foresight Tools
Need Seekers
over-index on
tools/mechanisms
that provide deep
end-user insights
1.16
0.91
0.85
0.90
(1) Responses reflect the indexed value of the likelihood that respondents are choosing a value higher or lower compared to the average across all responses. An index value of
“1” represents the indexed average of responses
1.21
Technology
Drivers over-index
on tools/
mechanisms that
guide where/ how
they can push the
tech frontier
Sources: Booz & Company 2012 Global Innovation 1000 survey
Booz & Company
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29. In 2013 we found that Need Seekers claimed the highest usage of
digital enablers, with 62% of respondents using them significantly
Respondents using digital enablers significantly in innovation processes
and product development cycles
in %, N = 381
62%
48%
25%
Need Seekers
Technology Drivers
Market Readers
Sources: Booz & Company 2013 Global Innovation 1000 survey; Booz & Company analysis
Booz & Company
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30. While priorities differ slightly by innovation strategy, companies
demonstrate a high level of agreement on most used digital enablers
Most Used Enablers by Innovation Strategy
Color Key:
Productivity enabler
Market and customer insight enabler
Market Readers
Monitoring tools
Idea capture tools
All Three
Social media management dashboards
Need Seekers
Visualization and
engagement tools
Big data tools
Customer profiling
Co-design tools
Project management
Crowdsourcing
Collaborative environments
CRM systems
ERP platforms
Simulation tools
Tech Drivers
Enhanced PLM
systems
Discussion platforms
Rapid prototyping
Sources: Booz & Company 2013 Global Innovation 1000 survey; Booz & Company analysis
Booz & Company
Booz & Company's 2013 Global Innovation 1000 Study_Navigating the Digital Future_Fact Pack.pptx
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31. For the complete study and additional
information on the annual
Booz & Company
Global Innovation 1000 Study
The 2013 Global
Innovation 1000 Study:
Navigating the Digital Future
Please Visit:
www.booz.com/innovation1000
(official release on October 22nd)
For media or other inquiries, please contact
Katrina Grochocki
+1-212-551-6415
+1-908-642-3766
Booz & Company
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