Many companies are developing an “innovation culture” to continuously monitor new technologies and review products, services, and internal processes.
Summary: Rising eight places from the 2010 report, developing an innovation culture and uncertainties inherent in untested technologies are the top factors cited for this risk.
Risks relating to emerging technologies have risen from below the radar last year to the fifth position on the radar in 2011. On average, across all respondents, the impacts of these risks are expected to continue to rise toward 2013.
The most frequently noted issue relates to the difficulty of developing an innovation culture.
However, an apparently similar proportion of respondents point to the inherent uncertainty that comes along with untested technologies, the commercial or operational performance of which is a “known unknown.”
There is somewhat more variation in geographies, as the risk is ranked second, on average, by respondents in both China and the US, higher than any other region.
In the US, this presumably reflects the challenge of commercializing leading-edge innovation. In China the challenge of rapid adoption of advanced technology, although the situation is changing as emerging markets increasingly become centers of innovation in their own right.
Risks relating to emerging technologies are the only top 10 challenge that is expected to be more important in 2013 in every sector surveyed. This finding may be inherent to the risk, as the phrase “emerging technologies” implies a challenge that has not yet reached its maximum impact.
The picture is similar across geographies: in all countries and regions except Russia and China, emerging technologies are expected to have a higher impact in2013 than today.
Managing the risk
A majority of companies surveyed indicate that they are actively managing this risk. By far the most frequently reported mitigation strategy is to develop an organization–specific “innovation culture” to monitor new technologies and review products, services, and internal processes continuously.
- Respondents in the banking, public administration and, to a lesser extent, health care sectors indicate that their efforts to respond to this threat are not yet adequate.
- Arguably the most difficult position is that of firms that have decided a risk must be managed, but have not yet implemented measures to do so. Almost no life sciences respondents fell into this category. But in the oil and gas sector, more than 30% did, which perhaps reflects significant uncertainty regarding low carbon technologies.
- Organizations operating in Europe apparently feel particularly exposed to technology risks. Nearly four in ten respondents from the Netherlands and approximately one-quarter of respondents from Sweden, Italy and Germany reported that their firms failed to invest sufficiently in technology or lacked an established process for evaluating innovation.
- In the US, the comparable figure appeared to be less than one in ten. In China, it is so small as to be negligible.
Organizations' responses to emerging technologies
Percentage reporting that measures to address emerging
technology risks are planned but not yet implemented, by sector
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