A recent HLB International survey of business leaders has shown confidence is up despite businesses facing a complex mix of concerns such as economic uncertainty and inflation, access to talent, and the ongoing pandemic.

HLB’s Survey of Business Leaders – Powering Your Innovation Engine, gains insights into the concerns and priorities of business leaders in 2022. Between September and November 2021, HLB collected 586 survey responses from business leaders across 46 countries, including Australia.

The report highlighted that although the pandemic has been an exceptionally difficult and challenging period for business, leaders have emerged feeling more confident to challenge the way things are done through innovation. In fact, 95 per cent of respondents said rapid and effective innovation is critical to future growth.

Over three-quarters of the leaders polled said they intended to fund innovation strategies from cash flow, while 28 per cent were considering debt refinancing and 25 per cent plan to raise equity funding.

The past two years however have proved innovation is possible without access to funding or strong levels of cash flow. For instance, innovative changes in hospitality enabled businesses to stay afloat during the harshest months of the pandemic then re-enter the market with more services and some additional revenue streams.

Compared to last year, the level of concern regarding talent acquisition has almost doubled. In 2021, 26 per cent of leaders identified talent acquisition as a business weakness. This year, 42 per cent share the same sentiment. Leaders indicated they are now facing pressure on two ends — attracting the next generation of talent to join their organisations and retaining current employees, whose morale and engagement levels are on the decline.

Other barriers to innovation identified in the survey were of an organisational nature, with lack of time (35 per cent) being the biggest hurdle to overcome followed by factors such as operational structure (27 per cent), lack of vision (26 per cent) and keeping the status quo (26 per cent).

Over the past 18 months, technology has proven to be a transformative force, pushing the boundaries of what organisations had previously thought possible. 53 per cent of leaders cited “technology” and 52 per cent said “new product and services launches” are the top focus areas for innovation.

Access to emerging technology tops the list for key enablers of successful innovation by 44 per cent, with artificial intelligence, cloud and robotic process automation listed as most important. Over half of businesses are focusing innovation efforts around emerging technology and launching new products or services. 42 per cent of leaders seek to adopt more emerging technologies to achieve growth in the next 12 months.

*The author is a member of the HLB International Global Planning Committee which managed the design and implementation of the report.

This article was first published in the Autumn 2022 issue of Financial Times.