IDC, Microsoft study finds 88% of PH businesses say innovation needed for economic recovery

The joint study conducted jointly by Microsoft and the International Data Corp. found the COVID-19 pandemic changing the perspective of businesses in the Asia Pacific (APAC). In the Philippines, 88% of business decision-makers all agree that innovation — or having an innovation mindset — is essential not only to survive but to thrive in a competitive environment.

The study titled “Culture of Innovation: Foundation for business resilience and economic recovery in APAC finds the figures are more than average for all organizations in the region (74%) but still fewer than the APAC culture of innovation leaders, where almost all (98%) agree that innovation is a necessity to staying resilient during a crisis.

The Microsoft and IDC study, which was conducted in two phases (Phase 1: Pre-COVID – Dec 2019-Jan 2020 and Phase 2: Since COVID-19-July 2020), revealed that in six months, organizations in the Philippines matured in adopting a culture of innovation by 4%. The number of adopters with a culture of innovation rose by 5 percentage points, up from 0% pre-COVID-19.

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APAC has almost 8% leaders and 12% adopters. Over 8 in 10 (82%) of organizations in the Philippines are speeding up digitalization to adapt to the new reality — from launching digital products and introducing digital payments to embracing e-commerce and automation.

“Innovation is no longer an option, but a necessity,” said Andress Ortola, country general manager, Microsoft Philippines. “We’ve seen how the recent crisis spurred transformation across the region, and organizations will have to integrate the ability to innovate into their core, to recover.”

Throughout the research, organizations’ maturity was mapped against four dimensions: people, processes, data, and technology. As a result, organizations were grouped into four stages: traditionalist (stage 1), novice (stage 2), adaptor (stage 3), and leaders (stage 4).

Leaders comprise of organizations that are the most mature in building a culture of innovation.

Business resilience

“Organizations in the Philippines have realized how much their ability to innovate fuels their performance and business resilience during the crisis,” said Daniel-Zoe Jimenez, associate vice president and head of Digital Transformation (DX), IDC Asia Pacific. “Since COVID-19, 56% of organizations in the Philippines, similar to leaders across the APAC (64%), have found innovation to be easier. This demonstrates how firms in the Philippines are embracing a culture of innovation to become more mature and accelerate their transformation.”

The study also revealed that while significantly more organizations in the Philippines found innovation to be hard (77%) compared with APAC leaders (68%) before COVID-19, they have since changed perceptions with significantly fewer Philippines organizations (44%) and leaders (36%) having this sentiment now. This is because they were forced to accelerate innovation in response to the disruptions in the market.

The study surveyed 213 business decision-makers and 231 workers in the Philippines within a six-month period, before and since COVID-19. The Philippines study was part of a broader survey among 3,312 business decision-makers and 3,495 workers across 15 markets in the APAC conducted over the same time period. The study uncovered how organizations can successfully fuel business resilience and performance through innovation.