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CEOs Say Investing in Innovation Is Not Paying Off

If CEOs are not seeing their more risky R&D investments produce needle-moving results fast enough, they may turn to incremental improvements rather than big, out-there killer ideas
If CEOs are not seeing their more risky R&D investments produce needle-moving results fast enough, they may turn to incremental improvements rather than big, out-there killer ideasPhotograph by John Churchman

By now it is almost gospel that investing in innovative new products and services helps a company’s long-term success. That doesn’t mean it’s easy. A new study from Accenture, “Why ‘Low Risk’ Innovation Is Costly,” found that fewer than one in five chief executives believes his strategic investments in innovation are paying off, and that this poor track record is starting to discourage companies from taking risks.

For the study, Accenture surveyed 519 companies across more than 12 industry sectors in France, Britain, and the U.S. Half (51 percent) of survey respondents reported they had recently increased funding for innovation at their companies. Almost all (93 percent) said the long-term success of their organization’s business strategy depends on their ability to innovate.