Innovation is a hot topic in the modern business world. It can drive a company forward, taking it to new heights of profitability and customer satisfaction.
Executives understand the importance of staying ahead of the game with innovation, as 84% of them consider it to be very or extremely important for their future success. However, Professor Clayton Christensen reports that 95% of product innovations fail.
Let’s talk about 15 cutting-edge business innovation statistics that may shift your perspective on what true business success looks like.
Business Innovation Statistics 2023:
- 84% of executives believed that innovation was critical to their future success.
- 95% of all product innovations fail, according to HBS professor Clayton Christensen.
- One in every five new products fails to meet customer expectations.
- 62% of fast-growing businesses intend to spend money on initiatives that boost innovation.
- Nearly 30% of companies actively include AI in their innovation plans. (Business Consulting Group)
- Compared to 44% of SMEs, 58% of large businesses were actively engaged in innovation.
- 84% of consumers cite innovation as being somewhat or very important in a company’s ability to sell them a product.
- 34% of consumers prefer to own products that make them appear innovative to others. 5
- Every year, an astounding 30,000 new products are introduced.
What percentage of innovations fail?
According to Umi-innovation, an innovation research blog, the grim reality is that it’s estimated that over 90% of innovation projects fail. Innovation, at its core, is about trying new things – new product lines, services, processes. So the risk for any one initiative to fail is relatively high.
Part of this failure can be attributed to underestimating the effort required and/or a lack of alignment between the company’s strategy and what they are actually doing on the ground to innovate. It is essential that companies think wisely before investing in new ideas and making sure they have support from all stakeholders involved if they want to increase their chances of success.
1.84% of Executives Said Their Success Is Dependent On The Ability To Innovate
According to Accenture, the importance of innovation in achieving success is undeniable; 84% of executives said that their success is heavily dependent on the ability to innovate.
This isn’t particularly surprising when looking around at today’s businesses, as those that remain most successful are often ones that have something new and unique to offer.
It can be far too easy for companies to stay in their comfort zone without taking risks, but taking an imaginative approach and being open to change can be extremely beneficial in terms of staying ahead of competitors. Adopting an innovative mindset could just be the key to a successful business.
(Accenture)
2. 95% of all product innovations fail
According to renowned Harvard Business School Professor Clayton Christensen, the vast majority of product innovations—95 percent—never succeed. This statistic makes it apparent that coming up with a practical and profitable innovation is no easy task.
Companies must focus on researching core customer needs, developing an effective marketing strategy, and even timing their launches correctly in order to make an idea work.
It can seem intimidating to bet your time and resources on something that has such a low success rate, but those brave entrepreneurs who are willing to go the extra mile may just reap the rewards of finding that one unbeatable niche in the market.
3.1 Out Of Every 5 New Products Fails To Meet The Customer’s Expectations
According to Innvolo, one out of every five new products fails to meet the customer’s expectations. This can be an enormous loss for a company in terms of time, money and resources already spent on development and promotion.
Despite the best efforts of a company to produce goods or services that satisfies customers, some products still remain unacceptable. Companies should put strategic plans in place that seek to understand customer needs better in order to ensure more successful product launches and market acceptance.
Taking the time necessary to research the customer’s habits, preferences, and buying behaviors can help reduce failed product launches.
Expert’s View on the Value of Innovation in Business
According to experts, the following are the reasons why innovation fails.
FAQs
What percentage of innovation projects taken on by a business succeed?
How many new products are made each year.
Accenture
