Your #business cannot compete on cost alone…

According to new research published today by Allianz Insurance, some 83% of UK managers rank Innovation as the key to their organization performing strongly.

However, despite the fact most leaders are fully aware of the benefits of innovation, the ongoing challenging economic environment has caused many to opt out of such projects in recent months.

For instance, 23% of the 500 respondents noted that the economic slump has pushed innovation further down their list of business priorities, with issues such as a lack of funding and a focus on profits being the main reasons behind this fact.

This approach is not only wrong it is patently short sighted. Innovating value added products or services is the only way to ensure long term survival never-mind success. Long-term it is not possible for organizations to compete purely on cost. Globalization ensures that whenever you compete purely on cost, someone, somewhere will be able to undermine your cost base and do it cheaper. The only way to compete successfully, particularly in the West, is to produce differentiated products with high added value, which cannot be easily reproduced elsewhere where labor costs are significantly cheaper.

This requires investment in R & D, training and advanced manufacturing techniques.

Innovation is essential to long term survival.

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