Innovation in flux

Economic uncertainty is impacting global corporate innovation, according to a new innovation “barometer” from General Electric Co., with nearly nine out of 10 executives reporting reduced appetite for risk.

GE”™s study arrived even as authors of the Global Entrepreneurship Monitor conversely said early stage business formation is surging both in the United States and overseas. The study is published by a consortium led by Babson College in Massachusetts and other institutions.

In Connecticut, after a tepid first quarter in 2011 the state finished the year with a 2 percent gain in new companies, according to the Connecticut secretary of state”™s office, which maintains records on business incorporations.

In December, however, the number of companies pulling the plug spiked more than 60 percent from the year before, a worrisome signal entering the New Year.

Connecticut ranked 30^th nationally on a 2010 entrepreneurship index published by the Ewing Marion Kauffman Foundation, trailing New York, New Jersey and Massachusetts. And as reported by the Fairfield County Business Journal earlier this month, patent applications published by Fairfield County inventors last year fell to their lowest level since 2002.

In a bid to increase entrepreneurship, Gov. Dannel P. Malloy unveiled multiple new sources of state funding last year ”“ perhaps most critically a revamped tax credit for angel investments in startups, featuring a minimum $25,000 investment rather than the previous floor of $100,000. The state is also providing its Connecticut Innovations venture capital fund with fresh funding to poach startups from other states.

Fairfield-based GE surveyed some 3,000 executives in 22 countries, who cited the United States as the world”™s most innovative nation, followed by Germany, Japan and China.

“Investing in innovation is a critical piece of global competitiveness and it comes in many forms ”“ from traditional R&D to new products, markets and business models,” said Beth Comstock, chief marketing officer of GE, in a prepared statement. “Cutbacks today will have reverberations on economic and social progress for years to come, and may seriously hinder a company”™s ability to compete. Governments and businesses both need to do their part to shore up the fragile innovation ecosystem.”

Fully 86 percent of those surveyed agreed that innovation is the best way to create jobs.

GE”™s Global Innovation Barometer report suggested companies are moving beyond the traditional, closed model of innovation and embracing one that features collaboration among multiple partners. That suggests increased regard for the creative power of smaller organizations and individuals, GE added, and attempting to find solutions that will work at the local level.

More than three in four executives told GE and survey partner StrategyOne that small to mid-size enterprises have the ability to be as innovative as large companies. And business leaders said that great innovations in this century will be about shared value ”“ addressing both human needs and the bottom line ”“ versus delivering profit alone.