2012 Global R&D/Innovation and Product Development Priorities Survey: Pursuing Emerging Innovation
Frost & Sullivan’s Growth Team Membership™ (GTM) recently completed its 2012 survey of R&D/innovation and product development executives globally. The executives were asked to identify their most pressing challenges for 2012. GTM will focus its best practices research to address the prominent issues identified in the survey.
This year’s survey indicates R&D executive struggle with two chronic challenges: (1) managing the product portfolio and (2) finding the next disruptive idea. In regards to portfolio management challenges, respondents struggle to develop accurate technology maps for planning, to prioritize innovation projects, and measure their portfolios’ success rate. Overcoming these challenges requires R&D executives to map out their portfolio strategy and develop key performance indicators to guide project prioritization and monitoring.
Identifying the next breakthrough idea rarely involves a “Eureka” moment, but does require time and resources. While companies understand the need to develop emerging technologies, they are reluctant to commit substantial resources to high-risk projects. This risk aversion appears to be impacting R&D budget allocations—budgets for incremental innovations are increasing, while disruptive technology budgets remain stagnant.
The survey asked respondents to “root cause” their top challenges by indicating if they stem from issues with staffing, process, technology/systems, or strategic alignment. R&D executives attribute their challenges to two primary causes: understaffing and processes (ineffective or nonexistent process). On a more positive note, R&D executives foresee additional resources—both staffing levels and budgets are expected to increase in 2012.
Given the pressure on R&D executives to tap into new ideas and emerging technology, survey respondents were asked about their use of open innovation. The majority of respondents employ some form of open innovation team (OI)—typically a small, dedicated sub-group within R&D. It comes as no surprise that OI’s primary role in the product development life cycle is idea generation and that customers are the primary source of ideas.
Even though companies are committed to using OI to increase their ability to develop emerging or disruptive technologies, respondents struggle with the fundamentals of establishing an OI process: securing internal buy-in, getting resources for idea testing, and creating a collaborative framework with external partners.