Notes from Innovation Policyworks
Innovation is Essential for Corporate Growth, Earnings and Employment
The World Bank has recently released a study that shows that employment growth is greater for firms that innovate compared to firms that do not. This finding is robust even when other characteristics of firms are taken into account, including their industrial sector or country. The benefits of innovation accrue to all innovating companies, not just those in high-tech or advanced economies. Indeed, the authors find that job creation is even more powerful in innovation-driven companies with larger proportions of unskilled jobs. This debunks the myth that innovation or knowledge-based growth does little for poorer segments of society.
Similarly, Arthur D Little studied top innovators globally and found that the most innovative global companies have as much as twice the revenue and double the earnings (EBIT) as the average company. The benchmarking study found that companies felt that innovation was critical, but did not take the steps necessary to implement a system to ensure success.
One system for innovation is the Innovation Engineering Management System (IEMS) developed by Doug Hall and the folks at Eureka Ranch, and being taught and implemented with firms by the Manufacturing Extension Partnership (MEP) nationally, and with the University of Maine. IEMS reduces the risk associated with innovation, and increases the speed of commercialization. I have a contract with MEP and believe that this system is extremely effective. If you want to learn more, send me an email or give me a call.