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Accelerating Science-Led Innovation for Competitive Advantage WHITE PAPER Sponsored by: Accelrys J oe Ba r k ai Fe bru ar y 2 0 12www.idc-mi.com "The ability to learn faster than your competitors may be the only sustainable competitive advantage." — Arie De Geus (as quoted in The Fifth Discipline by Peter Senge) As globalization expands in scope and complexity and economic andF.508.988.7881 competitive pressures intensify, discrete and process manufacturing companies experience increasing price pressure from customers and suppliers, low-cost competition, and high expectations for profitable growth from investors and shareholders. To respond to these challenges, product companies in all industry sectors must accelerateP.508.988.7900 innovation and learning and achieve a higher level of innovation efficiency to remain competitive and drive top-line growth. However, there is a growing consensus that innovation is stalling or even decreasing in its effectiveness, and evidence concerning the highGlobal Headquarters: 5 Speen Street Framingham, MA 01701 USA failure rate of product innovation and commercialization is abundant. Across industries, only about 25% of projects result in a product that reaches the market, and of those projects, two-thirds fail to meet the companys original expectations. Fully 20% of projects take too long and miss their market targets, and 35% of product companies have experienced at least one runaway project in their history. All in all, about 45% of the resources allocated to product development and commercialization are wasted. In certain industries, such as pharmaceuticals, these numbers can be considerably higher. In the current competitive environment, frivolous and wasteful innovation is a luxury no company can afford. While effective and efficient innovation is critical to competitiveness, and top-notch innovation resources are an increasingly scarce commodity, many companies still treat innovation as an inherently unstructured and therefore unmanageable process. This is especially true in scientific innovation, where the available tools have been inadequate to address domain complexities and process disciplines. As a result, many companies do not invest in productivity tools to productively manage innovation and experimentation and maximize the value of their human capital and enterprise resources. February 2012, IDC Manufacturing Insights #MI233313