Eighty-nine per cent of UAE businesses regard innovation as a strategic priority to help drive business growth, with more than half stating that developing new business models is a promising way to boost future performance, a report said.

GE announced the findings of its third annual GE Global Innovation Barometer survey, revealing that the UAE is one of only two countries in the region where the study was conducted, highlighting GE’s commitment to the country, which has identified innovation, knowledge and sustainable development as key drivers of its growth.

The only Arab country classified as an innovation-driven economy by the World Economic Forum Global Competitiveness Report 2012-13, the UAE is ranked 24th out of 144 globally in overall competitiveness.

In all 3,000 executives from 25 countries were surveyed with 73 per cent of the respondents in the country stating that innovation, marked by improvement of products and services, had contributed to stronger business performance in the past.

Nabil Habayeb, GE’s president and chief executive officer for Mena and Turkey, said: “In its third year now, the GE Global Innovation Barometer underlines the strategic importance that businesses in the UAE place on innovation. Quite significantly, UAE businesses demonstrate their openness to partnerships to drive innovation, with 88 per cent of the respondents stating that their firms are increasingly looking at innovating through partnerships.”

“In other significant findings, UAE businesses feel that the government and public authorities are allocating an adequate share of budget to support innovative companies. A majority of the respondents, at 86 per cent, state that SMEs and individuals can be as innovative as large corporations, highlighting the success of the UAE in promoting the SME sector, which contributes significantly to the non-oil GDP.

“The findings complement GE’s growth approach to the UAE, where we are focused on building business partnerships, knowledge sharing and human capital development, which the country’s business executives identify as key drivers to innovation,” he added.

Power of Collaboration

An overwhelming 91 per cent of UAE respondents said they would be more successful at innovation through partnerships than by going about it alone – four points more than the global average of 87 per cent.

•    The UAE executives said partnerships are important to enter new markets (80 per cent), access new technology (79 per cent), speed up time to market (78 per cent) and improve an existing product or service (75 per cent)

•    72 per cent said collaborations will help their businesses in benefiting from the partner company’s sales force – 14 points higher than the global average

•    Barriers to collaborative innovation, according to UAE respondents, are lack of protection of confidentiality/IP (58 per cent) and lack of trust in partner companies (43 per cent)

Innovation as Driver for Growth

Eighty-one per cent of the UAE respondents said that understanding customers and anticipating market evolutions is the most important ability needed by businesses to innovate successfully

•    81 per cent believe innovating on improving products and services will drive business performance

•    Respondents said developing new technology (70 per cent), creating an environment conducive to innovation (69 per cent), and mining data inside and outside the company (62 per cent) are key abilities businesses have to muster to innovate successfully

•    62 per cent said localized innovation to meet domestic needs will play a key role in driving business performance

New Business Models and Talent Development

Reiterating the growing emphasis that UAE businesses place on innovation, the survey identified that 54 per cent of the executives believe creating new business models is important to boost performance.

•    62 per cent said attracting and retaining innovative people is another key driver for innovation

•    While 58 per cent of UAE business executives report that the country has a strong innovation-conducive environment, 54 per cent expect decision-makers to encourage a stronger entrepreneurial culture in the education system through stronger linkages between students and business-savvy individuals

•    46 per cent said creating  financial environment that encourages the development of venture capital to support innovation is important

Although, UAE executives largely perceive innovation as a positive force and key economic driver, 45 per cent of the respondents believe that with innovative practices creating more competition among businesses and making some products and services obsolete, it could have a negative impact on the economy in the long-run. This perception is shared by more business executives in the country than the global average of 30 per cent.

This emerging “Innovation Vertigo” – an uneasiness with the changing dynamics of today’s business landscape and uncertainty over the best path forward – is challenging leaders to think differently about how they will achieve growth. Many executives, however, seem to be embracing this complexity by exploring new and sometimes unexpected opportunities to innovate.

“Innovators must be resilient or risk being left behind,” said Beth Comstock, senior vice president and chief marketing officer of GE.

“Change has become constant and we see leaders responding by betting big on more unconventional approaches to innovation to unlock growth. At GE, we are exploring different markets, partnerships structures and business models – all in the pursuit of uncovering new ways to better serve our customers and meet the world’s biggest challenges head on,” Comstock added.

The Barometer was commissioned by GE and conducted by independent research and consulting firm StrategyOne to explore how business leaders around the world view drivers and barriers to innovation and how those perceptions influence strategy. – TradeArabia News Service