Innovative media and technology companies are accelerating out of sight of their rivals with a phenomenal growth rate.
A fifth of creative, technology and telecom companies expect to grow by 90% in the next five years.
That’s double the rate of their competitors in the sector, according to financial consultancy PwC, which published the study.
The average company in the sector trends at a 37.5% growth rate.
The top performers also expect to translate that surge in growth to revenue.
These stellar firms earned an average extra $1 billion each over the past three years compared to their competitors, which PwC equates to an additional 14% in profits.
Producing the goods
The research puts their success down to more radical innovation than their rivals.
Dan DiFilippo of PwC said: “It’s not enough to come up with an innovative product to stay ahead in the market. Companies must keep producing the goods, and that’s what makes them stand out from their competitors.
“Companies that concentrate on delivering innovation enjoy higher revenues and lead their markets, according to our research.”
The study revealed that creative and technology companies that lead their sectors tend to look at incremental innovation, by changing or improving existing products and services to protect market share and margins.
However, competitors react quickly to these changes by upgrading their own products and services.
Companies that rely on breakthrough innovation see improved revenue and margins because their competitors are left further behind and have to work harder to catch up – and often by the time they do, the breakthrough innovator is ready with another market leading idea.
Business necessity
“Few companies are in this bracket,” said DiFilippo. “Less than 15% of technology companies can maintain this constant innovation.”
The survey also highlighted that entrepreneurs at the head of these company’s recognise innovation keeps them ahead in the market, with 83% understanding the significant contribution innovation makes to their companies.
Another 48% regard innovation as a business necessity.
Investment also surfaced as a key element of innovative technology businesses. The best performers consistently reinvested profits in new research and products – and those that spent the most returned the best growth and profits.
