**5. The role of digital innovation**

One of the strengths of our survey is the ability to examine the importance of digital innovation, which has expanded considerably since the surveys from 2010 and earlier. We find extensive evidence that digital technologies are amongst the most important in firm innovation. Out of 600 innovation projects, 88.5% of them were "primarily digital" (vs. not). This share varied little across industries, with High Tech and Finance having similar shares to Manufacturing, Utilities, and Pharmaceuticals. Indeed, no industries were statistically significantly different from each other (**Table 5**). At first glance this is somewhat surprising, but it is consistent with the enormous gains that have been made in computing [43, 44] and arguments that only

**Figure 2.** *How external are different innovation sources?*

in recent years has the confluence of several processes converted firm digital transformations from quantitative progress to qualitative change [45].

The importance of digital innovation is even more clear when innovation projects are disaggregated to separate out firms' most-successful innovations from their other



**Table 5.**

*Share of projects that are primarily digital.*

ones, as shown in **Table 5**. Whereas 79% of 'other' projects were digital, an overwhelming 97% of the most-successful ones were fueled by digital technology (an 18 percentage point increase, statistically significant at p < 0.01).
