What tech needs to do to keep its innovative reputation in tough times

People think tech is the most innovative industry. Here’s how they can keep that reputation in a down economy.

Big Tech’s growth is slowing as the global economy is impacted by inflation, uncertainty due to the ongoing war in Ukraine and continued supply chain disruption. The steep hiring and growth curves experienced during the pandemic continue to stall, at least for now, with Meta, Amazon, Google, Twitter, Uber, Salesforce and others announcing job cuts. But these companies are still widely seen as innovative in Ipsos research.

Take a look at our detailed insights as you consider implementing these three recommendations:

  1. Continue and even increase investment in closer-in innovation that will deliver near-term value to users. Releasing new or improved features that elevate user experience today is the most tangible way to impact perception in the short-term.
  2. Ensure that innovation programs have strong foundations in understanding user needs, so that product development can keep up and deliver as they evolve. Refresh insights on user needs to design new features or find use cases for developing technologies that solve user tensions.
  3. The power of technology to change the world for the better is inspiring, and tech companies deserve due credit. Speak to tech’s leadership position in innovation through communications that amplify efforts to solve global problems such as reducing emissions, helping people be healthier, or increasing accessibility to information, community, etc.

KEY FINDINGS:

  • An Ipsos survey on which industries consumers find to be most innovative found tech industries topped the list.
  • Developing or leveraging technology is top of mind for consumers when thinking about attributes of innovative companies.
  • When asked to use descriptors of companies they find particularly innovative, 37% said they looked for companies that constantly find ways “to make products or services available today even better.”

Big Tech’s growth is slowing as the global economy is impacted by inflation, uncertainty due to the ongoing war in Ukraine and continued supply chain disruption. The steep hiring and growth curves experienced during the pandemic continue to stall, at least for now, with Meta, Amazon, Google, Twitter, Uber, Salesforce and others announcing job cuts. But these companies are still widely seen as innovative in Ipsos research.

The wake of the 2008 recession demonstrated that companies that had strong market perception as “innovative” atop a solid foundational business rebounded most quickly. And this makes sense. Companies that develop their offerings with the evolving needs of their customers are far less likely to be left behind as the economy recovers and spending increases. Investment and valuation of innovative companies is also higher than those who get less credit for being innovative, as the marketplace bets on their success. Being perceived as innovative is a critical driver of business growth under typical economic conditions and becomes even more important to fuel recovery in down economies.

To establish technology’s dominance as the leaders in innovation, we asked two questions, each of independent groups of consumers to eliminate the possibility of one question biasing the next. The first asked consumers to rate industries on perceived innovativeness and demonstrated that Big Tech categories rise to the top. 21% rated electronic devices as extremely innovative, followed by software/apps at 17%, with other tech industries outpacing pharmaceuticals, manufacturing, packaged foods and others.

Tech industries are perceived to be most innovative

The second came from a different direction, and asked consumers to tell us which companies come to mind as “leaders in innovation.” This demonstrated that Big Tech and other technology companies largely dominate consumer perception, with Apple, Amazon, Google, Microsoft, and Samsung taking top mentions.

Tech companies are considered leaders in innovation

In consumers’ minds, technology-driven industries and technology companies define what it means to be “innovative.” This is not unanticipated. If we consider a general definition of technology to be “the application of scientific knowledge to the practical aims of human life or to the change and manipulation of the human environment” (Encyclopedia Britannica), we quickly see an intrinsic connection to “innovation” itself, generally defined as “a new idea, method, or device” or “the introduction of something new” (Miriam Webster).

Without technology, there is no product innovation to add value to the practical aims of human life or change in the human environment. And this connection is not purely academic, but lives in people’s minds. When asking consumers which qualities, characteristics or actions drive perception of a company being innovative and analyzing these data through Ipsos’ Mental Network Modelling, several themes emerge. Of all descriptors mentioned by more than 1.5% of the sample, future-oriented terms comprise 41%, personality characteristics comprise 21%, value/quality improvements comprise 20% and action-focused comprise 4%. While it is not surprising that future-oriented terms most frequently describe innovative companies, references to new or advanced technology represent 70% of all future-oriented category responses. 

Technology is a key attribute of being innovative

Part of this perception stems from Big Tech’s “anything is possible” mindset, backed by moonshot innovation programs that truly stretch perception of how we will interact with the world, with smartphones, autonomous vehicles, the metaverse, and commercial space travel as common examples. As we now see in this economy, fiscal responsibility includes reducing or discontinuing some programs that have not yet returned value to shareholders or where the path to value is less clear. So, the question is, how can tech companies keep up perception as the sector that leads in and defines innovation while divesting from their most inspiring innovation programs?

To answer this question, we asked consumers to rank a set of attributes by their importance in driving perception of an “innovative company” where ranks 1 to 3 indicate the three most important drivers.

Focus efforts on what drives perception

Results demonstrate that consumers believe that innovative companies constantly find ways to make products or services today even better (37%) and create products or services that solve important global problems (e.g. medical, environmental, economic) (35%) as most important, followed closely by developing products or services that make users everyday lives easier (33%) and creating products or services that meet users’ needs as they change/evolve (32%). This provides direction for tech on where to focus and how to message their innovation efforts in ways that will positively impact perception as market leaders in innovation.

WHAT’S NEXT:

We make three recommendations to technology companies resulting from this research:

  • First, continue and even increase investment in closer-in innovation that will deliver near-term value to users. Releasing new or improved features that elevate user experience today (“…find ways to make products or services today even better” and “…make users everyday lives easier”) is the most tangible way to impact perception in the short-term.
  • Second, related to the first recommendation, ensure that innovation programs have strong foundations in understanding user needs, so that product development can keep up and deliver as they evolve. Refresh insights on user needs to design new features or find use cases for developing technologies that solve user tensions.
  • Third, speak to tech’s leadership position in innovation through communications that amplify efforts to solve global problems. Although investment in moonshot innovation may shift, development of new products or processes that reduce emissions, help people be healthier, or increase accessibility to information, community, or the world all deliver against this powerful driver of perception. The power of technology to change the world for the better is inspiring, and tech companies deserve due credit.

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