Innovation Management Watch Summary: “Driving the Innovation Agenda in Uncertain Times: A Perspective from CEOs” by Boston Consulting Group

Economic uncertainty, rising cost pressures, and competing business priorities are making it increasingly difficult for organizations to sustain their commitment to innovation. Yet, while challenging conditions often encourage companies to focus on short-term performance, reducing innovation investments may weaken their ability to compete and grow over the long term. 

In a recent article, Boston Consulting Group (BCG) examines how CEOs can maintain innovation as a strategic priority despite economic volatility and resource constraints. Drawing on discussions from BCG’s CEO Summit in California and research on innovation performance, the article highlights why organizations must balance immediate operational demands with investments that support future competitiveness. 

BCG’s research suggests that companies that continue innovating during periods of economic stress are often better positioned to outperform their competitors. An analysis of companies appearing on BCG’s annual Most Innovative Companies list since 2005 found that leading innovators outperformed the broader market by an average of 2.4 percentage points annually in total shareholder return. Their performance was particularly strong during major disruptions, including the 2008 financial crisis and the COVID-19 pandemic. 

These findings reinforce the importance of treating innovation as a sustained strategic commitment rather than an activity that expands or contracts depending on economic conditions. Judith Wallenstein, who leads BCG’s CEO Advisory, observes that uncertainty often makes organizations more risk-averse, even as changing market conditions increase the need for innovation. 

However, maintaining innovation investment requires more than leadership ambition. BCG emphasizes the importance of establishing effective innovation systems, strengthening research and development capabilities, and demonstrating disciplined execution. Leaders must also make difficult decisions about which initiatives to prioritize and which to discontinue, ensuring that limited resources are directed toward the most promising opportunities. 

Another important consideration is the growing influence of artificial intelligence on corporate innovation agendas. While AI can accelerate research, experimentation, and product development, BCG cautions against allowing technology investments to overshadow broader innovation priorities. Organizations must continue examining evolving customer needs, competitive threats, and opportunities to develop better products, services, and business models. 

Beyond individual projects, BCG highlights the importance of building organizational capabilities that support continuous innovation. This involves embedding innovation into decision-making, resource allocation, talent development, and company culture. Organizations must also encourage appropriate risk-taking and recognize that unsuccessful experiments can contribute valuable learning when managed effectively. 

The key takeaway for innovation leaders: Sustaining innovation during uncertain times requires more than protecting budgets or generating new ideas. Competitive advantage depends on leadership alignment, disciplined prioritization, effective innovation management systems, and the ability to embed continuous innovation throughout the organization. Rather than treating innovation as a separate initiative, leaders must develop the organizational capabilities needed to adapt, compete, and create long-term value. 

Welcome to the latest in our series of Innovation Management Watch summaries, where we highlight relevant insights and developments shaping innovation management today. 

This summary is based on the Boston Consulting Group article, “Driving the Innovation Agenda in Uncertain Times: A Perspective from CEOs,” published on June 16, 2026. All rights and original content belong to Boston Consulting Group and the respective authors.