Source page: McKinsey & Company
Commentary
Cutting edge or cutting back?
Innovation | Strategy
July 24, 2025 – Companies are trying to make the most of their innovation budgets, but many are holding steady or cutting back on innovation investments while still intending to generate higher returns, a McKinsey survey finds. Among all surveyed organizations, 37 percent indicated they would increase innovation spending, but 53 percent would maintain investments in innovation, and 8 percent would trim spending, note Senior Partner Matt Banholzer and coauthors. Healthcare, consumer goods, and technology sectors led the way in willingness to spend on innovation.
To read the article, see “Investing in innovation: Three ways to do more with less,” June 5, 2025.
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Visual form
Horizontal stacked bar chart.
Layout / body structure
The chart is a single panel read top to bottom by industry, with one total row at the bottom. Each industry row is a 100 percent horizontal bar split into multiple spending-response categories.
What is being compared
It compares how organizations across industries expect innovation spending to change over the coming 12 months. The industries include healthcare and pharma, consumer goods and retail, technology media and telecom, energy and materials, business and professional services, financial services, advanced industries, travel logistics and infrastructure, and an all-other-industries grouping.
Measurement system
The bars use percent of respondents. Colors represent six response categories ranging from increasing spending to don’t know or not applicable, and the numbers are printed directly inside or beside the corresponding segments.
Visible structure inside the graphic
Each industry row begins with teal and blue segments for spending increases, followed by darker blue segments for maintaining or reducing spending. Healthcare and pharma has the largest leading growth segment, travel and logistics has a notably large planning-to-increase segment, and the total row at the bottom summarizes the overall distribution. A bracket under the total row highlights the share of companies freezing or reducing innovation spending even though innovation remains a priority.
Main takeaway from the visual
The chart shows that many companies still describe innovation as essential, yet a large combined share are either freezing spending at current levels or trimming it rather than accelerating investment aggressively.
Key standout values or extremes
Healthcare, pharma, and medical products has the strongest increase-to-drive-growth share at 50 percent. Travel, logistics, and infrastructure leads the planning-to-increase-without-increasing-spending segment at 44 percent. In the total row, 37 percent say they are increasing spending to drive growth, 29 percent are planning to increase growth without increasing spending, and 24 percent are maintaining current innovation spending while expecting to maintain current growth.
Controls / sequence, when applicable
This is a static chart image with no in-chart controls to operate.
Companion media, when applicable
There is no separate companion audio or video; the chart image is the full visual on this page.