UK businesses are failing to spend on innovation despite placing a high value on it.
Medium-sized businesses (90%) believe that being better at innovation than competitors is fundamental to their long-term survival. However, few companies (26%) are confident that their company is excelling at innovation.
Part of the problem could be that the average company invests just 6.7% of its turnover in innovation.
When it comes to driving innovation in the business, research from KPMG found that around half of the 215 medium-sized businesses surveyed had a dedicated team or a network of innovation across the business.
Three quarters were found to have no formalised measurement for Return on Investment, or an agreed process of financing for innovation. Although around 50% of respondents agreed that data insights are vital to the planning and execution of innovation across the business, only a third felt their use of data was thorough enough.
Those that are innovating are putting the customer at the centre of their plans, many (89%) are using face-to-face meetings with customers to shape new innovations, while 70% said they actively involve customers in evaluating and refining their ideas.
Despite this positive, a failure to use data is apparent. Only 32% use customer behavioural data to inform innovation, while only 28% run customer surveys of use insights from social media.
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