It is estimated that the largest 1000 companies in the world spend US$782 billion[1] on research and development (R&D) – an indication of its importance in the global marketplace.
Research from Stanford University highlights the growing cost pressure involved in R&D, with productivity declining by a factor of 41 since the 1930s, working out at around 5% per year. The university translates this into organisations needing to spend considerably more to achieve the same outputs.
Despite the cost implications jumping off the carousel has even worse consequences. Studies from the London School of Economics[2] shows that firms who achieve at least one new product launch per year boost their revenue productivity an estimated 17%, with each new launch adding an extra 22% to their productivity rating. What’s more, the University of Houston found that investing in one’s innovation capacity had a significant impact on both the profitability of firms and their share price – that fact should garner the interest of all business leaders.
Each year, consulting firm PwC conducts an Annual Global CEO Survey[3] with the purpose of understanding which hot-button issues are on the minds of today’s global business leaders. It is reported that over the years, innovation has remained at the forefront of their concerns. This is understandable in light of the number of companies that have entered the market with new disruptive technologies set to upset the apple carts of established businesses, industries and even countries. Media reports abound with stories of agile start-ups upending venerable institutions who failed to remain on the cutting edge of innovation. Innovation wars can leave many companies in their wake.
Part of the problem is that innovation is such a catch-all term that it makes it very difficult to pin down precisely what it means. The reality is that the term can be applied to everything from business models to new processes.
What has innovation got to do with cybersecurity?
The answer to that is – everything. Just look at the innovation applied by criminals on an annual basis, constantly inventing different ways to gain access to your valuable data and ransom it back to you. They constantly reinvent themselves, their technologies, attack methods – why would you think that if you stand still, you can deal with this incredible rate of innovation?
Deloitte[4] notes that definitions of cybersecurity conjure up ideas of technology and IT, particularly centred around the confidentiality, integrity and availability of data. However, as the pace of digital transformation accelerates, cyber risks will continue to manifest through business operations, product launches and other areas of enterprise. They go on to note that as a result, the definition of cybersecurity in the modern world is increasingly diverse and responsive to new and emerging threats.
These threats can manifest from rapid technological innovation if an holistic view of cyber risk is not included in the innovation process. Basically, what that is saying is that as we innovate and produce incredible new technologies that change our lives and businesses, we also need to look at them critically and assess what risks they bring to the business and how these can be mitigated.
As the 4th industrial revolution gains pace with 5G rollouts and more, business leaders and innovators seek to rapidly mobilise new technologies within the transformation process, with the challenge being rapid rollout with mitigated risk. This goal developed into an urgent imperative as the need to operate remotely hit world businesses in the wake of the pandemic.
Cybersecurity policies and strategies need to be designed to support and now halt or slow, the progress of innovation. New technologies and innovations which understand the importance of cybersecurity are better equipped for long-term success and customer trust.
Deloitte confirms that factoring in cyber risks from the outset often leads to more successful outcomes and lower cost when compared with any post implementation fix or bolt-on. They go on to emphasise that cybersecurity augmented by innovation, can propel us forward to an exciting and digitally-enabled world. I would agree with that statement and with one they also put forward and that by being cyber savvy, you can be confident in taking full advantage of every technological opportunity.
The downside is that without business leader education and awareness programmes on this topic, in conjunction with the mitigation of security risk at a company level, companies miss the opportunity to position themselves for sustainable future transformation through innovation.
In Mazibuko’s second article on the topic of innovation and cybersecurity, he will outline how the combination of these two powerful factors can act as business enablers.
[1] https://ideadrop.co/innovation-management/different-types-of-innovation/
[2] https://cep.lse.ac.uk/pubs/download/dp1607.pdf
[3] https://www.pwc.com/ceosurvey
[4] https://www2.deloitte.com/au/en/blog/innovation-blog/2020/what-cybersecurity-do-with-innovation.html
© Technews Publishing (Pty) Ltd. | All Rights Reserved.
printer friendly version