What’s Keeping Innovation Leaders Up at Night?
At our recent Lux Forum in Cologne, I had the privilege of engaging with over 30 senior innovation and R&D executives from some of the world’s largest chemicals, energy, and consumer products companies. Their message was clear: The innovation landscape in 2025 is more uncertain than ever — but leaders who adapt will shape the future.
Seven Key Themes Driving Innovation Leadership in 2025
ONE: Narrowing of Horizons
- The expansive vision that defined 2022–2024 is contracting. Companies are shifting from broad exploratory innovation to near-term, execution-focused strategies.
TWO: Regionalization of the World
- Globalization is fracturing, leading to region-specific innovation and supply chain strategies. Companies must navigate complex geopolitical and economic divides in their R&D and manufacturing footprints.
THREE: Strategic Reviews Stalling Innovation
- Expensive capital and market uncertainties are triggering strategic reviews, leading to stalled investments in innovation.
- When companies shift to review mode, they halt risk taking and long-term R&D projects.
FOUR: The China Innovation Divide
- China is playing the long game — deep investment in R&D across short-, medium-, and long-term horizons.
- China’s talent pool is world class.
- China is building monopolies by undercutting global prices then dominating markets.
- While the West focuses on quarterly results, China is making 20-year bets.
FIVE: The Death of Sustainability as an Ideology — A Pivot to Profitability
- Companies admit they failed to justify the ROI of sustainability.
- The new focus? Commercial viability first, sustainability second — as a means, not as an end.
SIX: Organizational Design Shifts: Centralized vs. Decentralized Innovation
- The pendulum keeps swinging between centralized and decentralized innovation models.
- Decentralization challenges include talent redundancy, misaligned processes, and fragmented cultures.
- Centralization challenges focus on slow execution and lack of business unit sponsorship.
- Core issues involve how to balance long-term R&D with immediate business needs,
SEVEN: Reorientation Toward Product Innovation That Sells
- The shift is toward market-driven innovation over technology-driven innovation.
- Leaders are focusing on products people will buy — not just futuristic R&D bets.
The lesson is clear: Companies that fail to take a human-centric approach to innovation will struggle to survive in this evolving landscape.
This is why Lux takes a different approach! We believe we must create proprietary research for our clients that is not just about deep science and technology research but is also about understanding what consumers actually want. That’s why Lux Research uniquely combines deep technical expertise with cultural anthropology and consumer insights, ensuring our clients take a customer-centric (i.e., human-centric) approach to innovation.
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At these exclusive gatherings, you’ll engage in the same powerful discussions with your peers — and more importantly, get brand-new research presentations from Lux analysts on these critical innovation themes.
