According to a recent global survey of 2,700 senior executives conducted by Boston Consulting Group, in conjunction with BusinessWeek, 14% of respondents are planning to reduce their innovation investments in 2009, while 58% said they would increase innovation spending this year. Among U.S. companies, 44% said they would increase their innovation spending in 2009. Nearly two-thirds (64%) of respondents identified innovation as a top-three priority at their company. That compares with 66% in 2007 and 2008.
"Companies remain firm believers in the importance of innovation, but they can't ignore what is happening in the economy," says James P. Andrew, lead author of Boston Consulting Group's report on innovation. "So they are increasingly orienting their innovation efforts toward the here and now, emphasizing immediate sales and the reduction of costs and risk. And, for the most part, those moves make sense."
Among respondents to the Boston Consulting Group survey, 88% of respondents identified new products to existing customers as important or very important contributors to their future success. However, 73% said cost reductions to existing products were important or very important to their future success.
The results of the survey provide a benchmark against which companies can measure their own innovation efforts during this time of economic turmoil. They also show that there is no single, clear-cut path to success in today's economy.