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64% of companies are cutting innovation budgets

A survey of large French companies shows they are going for fewer projects but looking to scale them up faster.

By Maija Palmer

Credit: Photo by form PxHere

Fewer projects — and smaller projects — but more emphasis on making them scale. This is what the picture looks like for corporate innovation in France, according to a survey by Founders Factory France.

They found that 64% of large French companies were planning to cut their innovation budget.

Chart: How will the covid crisis impact your innovation budget?

However, said Albin Serviant, chief executive of Founders Factory France, the remaining innovation projects were getting far more attention from the C-suite.

“Innovation is a board-level issue now. There are fewer projects but more emphasis on scaling them,” he said.

“Innovation is a board-level issue now. There are fewer projects but more emphasis on scaling them.”

This is both good and bad news. “It is good news for chief digital officers; they are suddenly at the forefront of strategic decisions. It is an opportunity for innovation teams to do something with more impact,” he said.

The bad news is that return on investment is under more scrutiny too. Some 71% of companies said this was the main performance indicator for innovation. Given that return on innovation can be difficult to measure, this may put teams under pressure to prove their worth.

 

Chart: What KPIs are you reporting?

Companies also seem to be putting more emphasis on innovation within the company. When asked what innovation measures were likely to be put in place this year, intrapreneurship was by far the most popular answer.

Chart: what innovation initiatives do you plan to put in place this year?

Using internal resources makes sense during straightened times, but intrapreneurship can be hard to pull off. It may be worth companies reading this guide to avoiding the biggest pitfalls.

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