Firms need to leverage new technologies to drive commercial growth, reduce operational costs and generate shareholder returns.

Successful Research and Development (R&D) programmes create a strategic advantage and reduce the risk of being either outperformed or replaced by competitors.

The new battleground is Digital Transformation. Investment and development in this area is increasingly becoming the new normal and the speed of transformation is accelerating.

Irrespective of whether this is deemed a challenge or an opportunity by incumbents, a relatively slow response can incur high penalties regardless of industry.

At an industry level, each firm needs to gain insight into their current R&D expenditure and benchmark themselves versus peers.

Rich data sources such as R&D scoreboards enable firms to set strategic direction for investment. R&D only pays if it is effective and results in innovation.

Economic research has extensively analysed the relationship between R&D expenditure, firm size and market concentration.

Theoretical and empirical studies are historically inconclusive to support the view that innovative advantage is associated with either large firms or high market concentration.

Large firms have material advantages whereas small firms have behavioural benefits. Existing firms and new entrants need to experiment and collaborate to grow, scale and effectively manage regulatory environments.

Successful partnerships present a great opportunity to generate the benefits of R&D outlined at the start of this article. Organisational structures need to adapt whilst avoiding unnecessary dependence.

Innovation is a journey which requires companies to successfully navigate people, culture and technology debt.

Policy makers play an important role to improve innovative performances across industries.

Firms need to recognise and reward workforce efforts to team up, challenge the status quo and take purposeful risks to initiate change.

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