Lack of innovation: a major risk in global recession

Siobhan Wilson at Oracle outlines the reasons for continuing to promote innovation during an economic downturn

Business executives are navigating a world of increasing economic volatility, trade and supply chain disruption, and geopolitical conflict.

The current economic downturn is pushing many business leaders to reconsider their growth and investment plans and turn their attention to shoring up their bottom lines. Many may defer riskier decisions and longer-term initiatives in favour of stability.

But let’s keep in mind some of the lessons we’ve learned these last few years. While a public health crisis and economic uncertainty have taken their toll, we’ve seen how building digital connections between businesses and their customers, employees, suppliers and partners remains critical to sustaining innovation, resilience and growth.

Quickly cutting one’s losses may seem like the easiest route out of a tricky situation, but having the right foundations that nurture and encourage innovation is key to achieving long-term success.  

Sustainable growth

Organisations burdened by the past three years of upheaval have found little respite from volatility. However, the most resilient have invested in the technologies and digital solutions needed to emerge stronger than before. For instance, 84% of CEOs believe that innovation is critical to growth, as they find new and creative ways to make the most of their resources and invest in better ways of working.

As we face another period of careful spend, organisations mustn’t shy away from innovation. Technology plays a key role in the UK’s future, unlocking growth potential across all sectors. Organisations must look at how best they can adapt to the economic headwinds, and which areas they are going to prioritise IT spend in to help them on this journey.

Organisations should be agile and future-focused in their decision-making. A key question they should be asking themselves is whether this IT investment will make a difference when businesses emerge from the economic crisis. Thinking beyond the next six months is critical for businesses if they want to create sustainable growth.

Innovating faster

During these times, it’s crucial that innovation speeds up, not slows down. It’s the red thread running through a successful business. Customer expectations are incredibly high and they will continue to evolve. Organisations must ensure that new products and services are aligned with their needs more than ever, and developed in a timely and effective manner ahead of the competition.

Investing in technology like the cloud, which can scale services according to customer and market demand, is key to this. HSBC, for example, is deploying Oracle Cloud Infrastructure to support and scale its mission critical services, while meeting data locality and security regulations. This is just one example of how organisations are speeding up the development, delivery and scale of new products and services, while ensuring the operational agility needed to grow and diversify.

In hospitality, a sector hit hard by the cost-of-living crisis, resilience has also been underpinned by innovation. To meet customer expectations amid massive business disruption during the pandemic, Center Parcs holiday villages implemented an AI-backed digital assistant to manage surges in demand. This automated support handles 65% of web chat traffic and has helped reduce customer wait times from three to five minutes, while providing new insights into guest pain points.

This has been key in helping the company continue to make enhancements, as well as maintain a high level of customer satisfaction. It’s about identifying roadblocks to success, as well as innovative technologies that can mitigate them.

The road to recovery

Businesses now understand how investment in new technologies such as cloud and AI opens the door to new capabilities, and can harness business data at scale. This effective use of data is the optimal route towards increased operational efficiency, as well as product innovation and differentiation. Organisations continue to modernise and digitalise not just in spite of current economic realities, but because of them.

Despite economic headwinds, market researcher IDC is projecting that IT spending in EMEA is expected to grow 5.2% in 2023, with spend in public cloud set to surpass £14.5bn in the UK. Technology and innovation will continue to play a central role in Britain’s recovery and resilience, even in the face of economic turbulence.

The route to success is not through being too cautious or timid. It is time for organisations to step up and be bold in their innovation during recovery. Those who continue to innovate when the chips are down, able to effectively weigh up decisions in the long term and short term, will ultimately come out stronger.

Organisations that think creatively and embrace innovation will be the ones that succeed during these adverse times. 

Siobhan Wilson is UK Country Leader at Oracle

Main image courtesy of iStockPhoto.com