Business Today - Dec 2022 - Jan 2023 issue

In-Depth
However, innovation is not confined to the
tech realm. Companies and corporations are
capable of, and should be, reinventing themselves
and cultivating innovation to capitalize
on the opportunities and learnings afforded
by these disruptions and launch new offerings
in pace with innovative startups.
New business is good for business
Recently, McKinsey & Company surveyed
more than 1,000 senior executives from every
region and a wide range of sectors, with its results,
unsurprisingly, suggesting that companies
that prioritize new business-building are
above others in terms of revenue growth.
According to the report, eight out of ten
stated that new business-building was a top-five
strategic priority; 46% said it was in their top
three. By 2027, the respondents said they expect
29% of revenue will come from new business,
which was defined as the creation of new
revenues through new products, services, or
businesses based on new capabilities.
The businesses that placed new businessbuilding
as their top-three priority showed accelerated
growth and higher resilience, even
during economic shocks; those surveyed estimated
that new business created in the past
five years accounted for 12% of their revenues
and 21% of their enterprise value.
The management firm revealed that, on average,
respondents have begun to invest 5% of
revenues into new business-building and are
establishing 1.5 new businesses annually.
A separate McKinsey & Company report
published in fall 2022, which conducted an
in-depth study of the growth patterns and performance
of the world’s 5,000 largest public
companies over the past 15 years, reaffirmed
revenue growth’s critical role in driving corporate
performance. An additional five percentage
points of annual revenue correlates with
an extra three to four percentage points of total
shareholder returns (TSR)—the equivalent
of increasing market capitalization by 33-45%
over a decade.
www.BusinessTodayEgypt.com January 2023
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