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COMPETITIVE INSIGHT
GTM™ European Union 2010
R&D/Innovation and Product Development Priorities Survey: Innovation on the Rise
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Frost & Sullivan's Growth Team Membership™ (GTM) recently completed its 2010 survey of R&D/innovation and Product Development executives in Europe. The executives were asked to identify their most pressing challenges for 2010. In the following article, we summarize some of the key survey results. There were 103 respondents.
R&D/Innovation and Product Development (R&D) in 2010 – A Snapshot
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R&D executives are optimistic about their company's 2010 performance
and predict a moderate increase in performance in comparison to 2009
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R&D's main external challenge is trying to avail of the opportunity created
by new product and service innovations
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The key internal challenge is finding effective methods of identifying
and developing breakthrough innovation ideas
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Most of the internal challenges facing R&D are caused by shortcomings
in process and systems technology
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Most R&D executives rate their function as "above average" in terms of
effectiveness
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Though budgets will remain static, R&D executives forecast a moderate
increase in their staffing levels for 2010
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Most R&D executives indicate they will increase their budget allocations
to short-term horizon technology and innovation projects in 2010
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B-to-B R&D executives indicate they will be increasing their budget
allocation to short-term horizon technology and innovation projects,
while B-to-C executives will be increasing spend for medium-term
projects
R&D/Innovation and Product Development Survey Executive Summary
R&D/ Innovation's top external challenges highlight companies' needs to differentiate their product portfolios, including green/sustainable projects, for competitive advantage and to distinguish themselves from the competition. Respondents' functional challenges vary widely and include identifying and matching innovation ideas to customer needs and allocating budget expenditures across the portfolio. B-to-C companies' challenges vary greatly from those of other respondents. B-to-C challenges include managing an open innovation process and obtaining external sources of funding, such as government grants. Executives identify Technology or Process as the root cause of their internal challenges - indicating the need to augment these processes and develop the necessary technology systems to support them. When asked to rank their R&D function's effectiveness in comparison to their peers most respondents rated theirs as "above average."
Respondents expect no change in their R&D/ Innovation budgets in 2010, but anticipate their staffing levels to increase moderately. A deeper look at budgets indicates that executives are split by business model on how they will allocate their budget across innovation project categories. B-to-B executives will increase their spending on short-term horizon technologies, while B-to-C executives will increase their expenditures on medium-term projects.
Respondent Demographics
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The majority of respondents work for Private (62 percent) rather than
Public (18 percent) companies
• The majority of the respondents (60 percent) work in a
business-to-business (B2B) environment
• Most of the respondents (49 percent) come from firms with revenues
below € 70 Million
Top Five R&D/Innovation
and Product Development Challenges
(By Business
Model)
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