GE 2016 Global Innovation Barometer findings reveal keen focus of Saudi businesses to strengthen digital innovation

GE (NYSE: GE) today unveiled the results from Saudi Arabia of its 2016 Global Innovation Barometer, which explores how business leaders and members of the public perceive the opportunities for, and barriers to - innovation in a complex global environment. 

Now in its fifth year, the research surveyed 2,748 senior business executives and 1,346 informed publics across 23 countries. In Saudi Arabia, the survey covered about 200 C-level business executives and informed citizens, just as the Kingdom embarks on a new era of growth underlined by the Saudi Vision 2030. 

Hisham Al-Bahkali, GE’s President & CEO for Saudi Arabia and Bahrain, said: “The GE Global Innovation Barometer findings from Saudi Arabia underline the deep interest among the Saudi business community to invest in talent and innovative technologies to drive a new era of growth.  This reflects the goals of Saudi Vision 2030, which aim not only to diversify the economy, but also to drive progress and transformational growth. Innovation is at the heart of the new development narrative of the Kingdom, and we are committed to nurturing it through our people, strategic investments, partnerships and localization initiatives.”

Nidal Ghizawi, Director of the Saudi GE Technology & Innovation Center, added: “Our investment in the Saudi GE Technology & Innovation Center in Dhahran Techno Valley is a compelling testament to our focus on promoting localized research & development. By working with the Saudi research community, our industry partners, and the GE Global Research Centers around the world, we are supporting the development of a new innovation ecosystem in the Kingdom that will help meet the requirements of our partners and the community, especially in Digital, Energy and Healthcare. With several patents to our credit already, the path-breaking research we undertake contributes to improved productivity levels in the Kingdom and has practical applications globally.”

A Clear Innovation Strategy 

The GE Global Innovation Barometer 2016 shows that Saudi Arabia is ready to build a new innovation ecosystem, with 69% of Saudi executives stating their organizations have a clear innovation strategy. They show a preference for innovating incrementally and a larger proportion of businesses in the Kingdom favor external innovation than their peers globally. 

79% of Saudi executives agree that innovation has netted positive results, stating they have seen growth in revenue and profit generated by collaborative innovation activities. 67% are willing to share the revenue stream (or losses) that could be generated through collaborative innovation. Highlighting their openness to leveraging big data, 73% of Saudi executives report an expansion of the ability of their businesses to analyze large and complex amounts of data, compared to only 48% in the previous 2014 survey. 

Overcoming the Challenges 

Saudi executives see a reduction in the difficulty to come up with innovative ideas – 49% now, compared to 65% in 2014. 58% say they are most challenged by the lack of sufficient investment and financial support for innovation. Nearly half the respondents feel that rewarding those in the organizations who create innovation and encouraging innovative people are key best practices to foster radical innovation. 57% say talent challenge remains, with 52% of executives looking for candidates with strong problem-solving skills, and 48% with strong creativity. 

Positive Effect of the Digital Revolution 

An overwhelming 81% of the informed public surveyed said that in the next 10 years, technological developments such as robotics and automation will radically transform the job market and nature of work. 84% said the most innovative companies will not only launch new products and services but also create new markets that previously didn’t exist. Some 41% of the business executives and 49% of the informed public feel that the digital revolution will have a positive impact on employment. Over one-third also said that it will lead to the creation of new jobs. 

The Future Worker

Across the globe, the survey finds that the future worker is changing with the rise of ‘nomad employees’ – people who favor freelancing and contracting modes. In the Kingdom, 68% of the business executives – compared to 81% globally – say a start-up ethos is increasingly becoming the norm for creating an innovation culture within companies of all sizes. More than the global average, 66% of the informed public and 62% of business executives said the current education system is adapted to fulfil the private sector’s demand for new talent and skills. Nearly two-thirds also said the current education system is preparing the next generation for the jobs of tomorrow. 

Advanced Manufacturing Ready 

Highlighting the role of digital industrial technologies in driving manufacturing sector efficiency and productivity, 78% of executives and 88% of informed citizens said that in the next 10 years, advanced manufacturing such as through 3D printing will radically transform the industrial sector.

Driving Force 

Nearly 42% of business executives and 40% of informed publics say that the private sector is now in the driver’s seat of innovation. One-third of business executives consider government should be doing more to drive innovation, followed by multinationals (20%) and universities & research labs (14%). More than the global average, 59% of the informed public says that the government is making innovation a priority. 

A Digital Future

Several questions in the latest survey discussed the importance of digital technologies. Nearly 70% of business executives and 80% of the informed public shared their concern about the impact of the fast-paced growth of digital technology on businesses, stating they are mindful that more and more businesses face the challenge of ‘Digital Darwinism’ – the risk of becoming obsolete if they fail to adapt to and embrace technological changes. Similar to the global average, 58% of the respondents said maximizing the performance of revenue streams and business models is important compared to opening up new business models. 

Energy Sector Ripe for Disruption

Some 61% respondents said the energy industry would be the sector to benefit most from investment in innovation, with nearly half of them agreeing that innovation will most likely be felt in increasing energy efficiency, and helping consumers use and waste less energy. 43% of business executives and 48% of the informed public said innovation will lower the cost of energy. 

The findings of the GE Global Innovation Barometer highlight the clear focus of businesses on developing a culture of innovation in preparation for a digital industrial future. GE is supporting the country’s innovation landscape through its various investments including in the Saudi GE Innovation & Technology Center, which has already achieved breakthrough results with several patents for localized research. 

The GE Manufacturing Technology Center (GEMTEC) in Dammam will also serve as one of GE’s global centers of excellence in innovation, especially in Hot & Harsh research. In 2015, GE announced US$100 million in new programs to strengthen the Company’s localization efforts, build research and innovation capacity, and create jobs in advanced manufacturing and software analytics. This built on the US1 billion GE already invested since 2012 that focused on furthering the Kingdom’s efforts in localization and diversification in the three key areas of Innovation & Business Development, Healthcare and Energy. 

GE has over eight decades of partnership in the Kingdom. It has a 2,000 strong workforce in the Kingdom, with 50% of its talent in highly skilled engineering and technology roles, and a Saudization rate of 70%. Through its local investments, GE has built a supplier base of over 300 local organizations, of which 150 are Saudi SMEs. Today, the GE Manufacturing Technology Center exports parts and services to more than 70 customers in almost 40 countries across Middle East, Europe and Africa, as well as the US.