2011 Global R&D Innovation and Product Development Priorities Survey Results

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2011 R&D / Innovation and Product Development Priorities Survey Results, in association with AIPMM.

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2011 Global R&D Innovation and Product Development Priorities Survey Results

  1. 1. growth team m e m b e r s h i p™ 1Global 2011 R&D/Innovation and Product Development Priorities Survey Results Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . 2 Section R&D/Innovation and Product Development What is the Growth Team Membership™ . . . . . . 3 3 intro Effectiveness and Expenditures . . . . . . . . . . . . . . 14 Survey Purpose and Respondents . . . . . . . . . . . . . 4 Section Section Open Innovation and Crowdsourcing . . . . . . . . . 20 External Factors Shaping R&D/Innovation 1 and Product Development Strategies . . . . . . . . . . 5 4 R&D/Innovation and Product Development Overarching Challenges . . . . . . . . 26 Section Section Key R&D/Innovation and Product 2 Development Challenges . . . . . . . . . . . . . . . . . . . . 9 5 Respondent Demographics . . . . . . . . . . . . . . . . . 27 in cooperation with www .aipmm .comThe contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved.
  2. 2. growth team m e m b e r s h i p™ 2011 survey results 2 Executive Summary Main External Factor The primary factor influencing R&D planning is the need for new products and services intro Key Internal Challenge Internal Challenge Root Cause Section The challenge is prioritizing innovation ideas and projects The challenge’s root cause is limited staff 1 Section 2 R&D Budget Resources Section On average companies allocate 6% of their revenue to R&D/Innovation budgets are expected to increase R&D/Innovation budgets moderately, yet staffing will remain static in 2011 3 Section 4 Open Innovation Challenge The challenge is creating an effective Open Innovation Crowdsourcing and Innovation Respondents primarily use Crowdsourcing for ideation collaboration framework Section 5The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  3. 3. growth team m e m b e r s h i p™ 2011 survey results 3 What is the Growth Team Membership™? The Growth Team Membership™ (GTM) is a GTM provides best practices, events, and services to subscription program that supports executives within enable executives to address internal challenges within the functions reporting to the CEO their companies CEO’s Growth Team™ GTM: Creating Client Value R&D/ GTM’s case-based best practices help executives: R&D/ intro Innovation Innovation Corporate Sales Strategy Leadership Section Speed the design and implementation of initiatives by 1 not reinventing the wheel Section Marketing CEO Corporate Development Save money and reduce risk by avoiding mistakes 2 made by other companies Investors/ Market Finance Research Accelerate problem solving with a cross-industry Section perspective 3 Competitive Intelligence Improve their function/company’s performance and Section productivity 4 If you have any questions or comments, please contact us Section 5 Email us GTMresearch@frost.com Visit us online www.gtm.frost.comThe contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  4. 4. growth team m e m b e r s h i p™ 2011 survey results 4 Survey Purpose and Respondents Research Objective Methodology Survey Population In Cooperation with To understand the most Web-based survey platform Target respondents were pressing external and internal Manager level and above challenges shaping R&D/Innovation and product R&D/Innovation and product development executives from development executives’ 2011 companies globally . planning . intro Section 1 Section 2 Section 3 Section 185 survey 4 respondents Section 5The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  5. 5. growth team m e m b e r s h i p™ 2011 survey results 5 intro Section External Factors Shaping R&D/Innovation and 1 Product Development Strategies Section 2 Section 3 Section 4 Section 5The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  6. 6. growth team m e m b e r s h i p™ 2011 survey results 6 Strategic planning for R&D is heavily influenced by demands for new products and renewed access to capital Top Three External Factors External Factor 1 Need for product and services innovation (33%) intro Section 1 External Factor 2 Access to capital/capital markets (12%) Section 2 Section 3 Demand for “green/sustainable” products and Section External Factor 3 services (12%) 4 Section 5 Survey Question: Please specify the Top Three external factors shaping your R&D/Innovation and product development strategy in 2011 .The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  7. 7. growth team m e m b e r s h i p™ 2011 survey results 7 R&D executives across the board are under pressure to deliver new products and services Top Three External Factors (By Business Model) B-to-B B-to-C Hybrid intro Need for product and Need for product and Need for product and External Factor 1 services innovation (32%) services innovation (47%) services innovation (31%) Section 1 Section Access to capital/capital Increasing number of Government regulation and External Factor 2 2 markets (14%) competitors (15%) policy (14%) Section 3 Demand for “green/ Decreasing customer willingness to pay Access to capital/capital External Factor 3 sustainable” products and Section [downward price pressure] markets (16%) services (14%) (20%) 4 Section 5The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  8. 8. growth team m e m b e r s h i p™ 2011 survey results 8 External Factors Impact on R&D/Innovation and Product Development intro Opportunities for R&D/Innovation and Product Development Section 1 Need for product and services innovation (76%) Section 2 Access to capital/capital markets (58%) Section 3 Demand for “green/ sustainable” products and services (79%) Section 4 Section 5 Survey Question: Please indicate if the following factors present a challenge or an opportunity for your 2011 R&D/Innovation and product development strategy .The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  9. 9. growth team m e m b e r s h i p™ 2011 survey results 9 intro Section 1 Section 2 Key R&D/Innovation and Product Development Challenges Section 3 Section 4 Section 5The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  10. 10. growth team m e m b e r s h i p™ 2011 survey results 10 Key R&D/Innovation and Product Development Challenges Snapshot All Companies B-to-B Companies B-to-C Companies Prioritizing innovation ideas Identifying breakthrough Prioritizing innovation ideas and projects new product ideas and projects intro Challenge 1 Challenge 1 Challenge 1 Section 1 Section Matching innovation projects Matching innovation projects Identifying breakthrough 2 to unmet customers needs to unmet customers needs new product ideas Section Challenge 2 Challenge 2 Challenge 2 3 Section 4 Identifying breakthrough new product ideas Monitoring regulations, government policies, and industry standards Managing without a formal process for ideation and idea execution Section 5 Challenge 3 Challenge 3 Challenge 3The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  11. 11. growth team m e m b e r s h i p™ 2011 survey results 11 Respondents’ challenges concentrate on filling, evaluating, and prioritizing the new product pipeline Top Five Key R&D/Innovation and Product Development Challenges Challenge 1 Prioritizing innovation ideas and projects (18%) intro Challenge 2 Matching innovation projects to unmet customers needs (11%) Section 1 Section Challenge 3 Identifying breakthrough new product ideas (13%) 2 Section 3 Challenge 4 Generating an accurate and relevant technology roadmap (11%) Section 4 Challenge 5 Managing an open innovation process successfully (9%) Section 5 Survey Question: Please indicate the top five functional challenges shaping your R&D/Innovation and product development strategy in 2011 .The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  12. 12. growth team m e m b e r s h i p™ 2011 survey results 12 Respondents’ challenges vary by business model Top Five R&D/Innovation and Product Development Challenges (By Business Model) B-to-B B-to-C Hybrid Measuring the ROI of your Identifying breakthrough new Prioritizing innovation ideas Challenge 1 innovation projects and intro product ideas (19%) and projects (44%) portfolio (17%) Matching innovation projects Streamlining research, design Section Identifying breakthrough new Challenge 2 to unmet customers needs and development activities to 1 (11%) product ideas (22%) create cost efficiencies (12%) Section Monitoring regulations, Managing without a formal Embedding the voice of 2 Challenge 3 government policies, and process for ideation and idea the customer in innovation industry standards (9%) execution (25%) processes (15%) Section Generating an accurate and Monitoring regulations, Matching innovation projects 3 Challenge 4 relevant technology roadmap (13%) government policies, and industry standards (25%) to unmet customers needs (13%) Section Finding viable new 4 Managing an open innovation Managing an open innovation Challenge 5 applications for existing process successfully (25%) process successfully (15%) products/capabilities (8%) Section 5The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  13. 13. growth team m e m b e r s h i p™ 2011 survey results 13 R&D/Innovation challenges are predominately caused by insufficient staff Top Five R&D/Innovation and Product Root Cause of Top Five R&D/Innovation and Development Challenges Product Development Challenges Challenge 1 Prioritizing innovation ideas and Staff: Limited resources (43%) projects intro Challenge 2 Matching innovation projects to unmet Staff: Limited resources (27%) Section customers needs 1 Challenge 3 Identifying breakthrough new product Staff: Limited resources (25%) Section ideas 2 Challenge 4 Section Generating an accurate and relevant Process: Lack of process (31%) 3 technology roadmap Section Challenge 5 Managing an open innovation process Staff: Limited resources (44%) 4 successfully Section 5 Survey Question: Please indicate if the root cause of your top five functional challenges are—staff, process, technology/systems, or strategic alignment .The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  14. 14. growth team m e m b e r s h i p™ 2011 survey results 14 intro Section 1 Section 2 Section R&D/Innovation and Product Development 3 Effectiveness and Expenditures Section 4 Section 5The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  15. 15. growth team m e m b e r s h i p™ 2011 survey results 15 R&D/Innovation and Product Development Expenditures and Effectiveness Snapshot All Companies B-to-B Companies B-to-C Companies Respondents rank their Respondents rank their Respondents rank their R&D/Innovation R&D/Innovation function’s R&D/Innovation function’s function’s effectiveness as “Average” effectiveness as “Above Average” effectiveness as “Above Average” intro Section Allocate 6% of their revenue to the Allocate 5% of their revenue to the Allocate 6% of their revenue to the 1 R&D budget R&D budget R&D budget Section 2 Respondents expect their staffing levels Section Respondents expect their staffing levels Respondents expect their staffing levels to increase moderately or stay the same to stay the same in 2011 to stay the same in 2011 3 in 2011 Section 4 Respondents expect their Respondents expect their Respondents expect their Section R&D/Innovation budgets to R&D/Innovation budgets to R&D/Innovation budgets to increase moderately in 2011 increase moderately in 2011 increase moderately in 2011 5The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  16. 16. growth team m e m b e r s h i p™ 2011 survey results 16 Respondents from B-to-B companies are more likely to rate their function’s effectiveness as “Above Average” R&D/Innovation and Product Development’s View of Its Effectiveness (By Business Model) All Companies B-to-B Companies Exceptional Below Average Exceptional 11% 12% 8% intro Average 36% Section 39% 38% Average Above Average 43% 1 Above Average Section 2 Hybrid Companies B-to-C Companies Section Below Average Exceptional 3 Below Average 14% 9% Exceptional 23% 22% Section 33% 44% 22% 4 Above Average 33% Average Above Average Average Section 5 Survey Question: Please assess the overall effectiveness of your R&D/Innovation and product development function compared to those in other firms within your industry .The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  17. 17. growth team m e m b e r s h i p™ 2011 survey results 17 Hybrid companies tend to allocate almost twice the average percentage of revenue assigned to R&D budgets 2010 R&D/Innovation and Product Development Budgets as a Percent of Revenue (By Business Model) 15% intro 10% Section 10% 1 Section All Companies 2 6% 6% 5% 5% Section 3 Section 4 0% B-to-B B-to-C Hybrid Companies Companies Companies Section 5 Survey Question: Please provide your 2010 total R&D/innovation and product development budget as a percentage of total company revenue:The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  18. 18. growth team m e m b e r s h i p™ 2011 survey results 18 In general, respondents anticipate no additional staffing in 2011 R&D/Innovation and Product Development Staffing 2011(By Business Model) All Companies B-to-B Companies Decrease Substantially Decrease Substantially 3% Increase Substantially 4% Increase Substantially Decrease Moderately Decrease Moderately 9% 10% 8% 10% intro 36% 39% 39% Section 42% Increase Moderately Stay the Same Increase Moderately Stay the Same 1 Section 2 Hybrid Companies B-to-C Companies Section Increase Substantially Increase Substantially Decrease Moderately 3 14% 9% 11% 11% Increase Moderately Section 37% Increase Moderately 4 40% 78% Stay the Same Stay the Same Section 5 Survey Question: In comparison to 2010, your 2011 R&D/Innovation and product development staffing will:The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  19. 19. growth team m e m b e r s h i p™ 2011 survey results 19 Respondents indicate that budgets will increase moderately in 2011 R&D/Innovation and Product Development Budget 2011(By Business Model) All Companies B-to-B Companies Decrease Substantially 3% Decrease Substantially Decrease Moderately Increase Substantially Decrease Moderately Increase Substantially 7% 11% 5% 5% 10% intro Stay the Same 29% Stay the Same 30% Section 50% Increase Moderately 50% Increase Moderately 1 Section 2 Hybrid Companies B-to-C Companies Section Decrease Moderately Increase Substantially Decrease Moderately Increase Substantially 3 11% 11% Stay the Same 11% 11% Stay the Same 27% 22% Section 51% 4 56% Increase Moderately Increase Moderately Section 5 Survey Question: In comparison to 2010, your 2011 R&D/Innovation and product development budget will:The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  20. 20. growth team m e m b e r s h i p™ 2011 survey results 20 intro Section 1 Section 2 Section 3 Section 4 Open Innovation and Crowdsourcing Section 5The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  21. 21. growth team m e m b e r s h i p™ 2011 survey results 21 Open Innovation and Crowdsourcing Snapshot All Companies B-to-B Companies B-to-C Companies intro Primary Open Innovation Primary Open Innovation challenge Primary Open Innovation challenge challenge is creating an effective is overcoming the fear of lost IP is establishing buy-in internally collaboration framework and competitive advantage Section 1 Challenge 1 Challenge 1 Challenge 1 Section 2 Formal networks (such a suppliers Formal networks (such a suppliers Specialized vendors created to Section and partners) are the primary form and partners) are the primary form foster open innovation are the 3 of crowdsourcing used of crowdsourcing used primary form of crowdsourcing used Challenge 2 Challenge 2 Challenge 2 Section 4 Section 5The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  22. 22. growth team m e m b e r s h i p™ 2011 survey results 22 Creating the initial framework for collaboration and establishing clear communications are the predominant challenges associated with Open Innovation Top Four Challenges of Open Innovation Challenge 1 Creating an effective Open Innovation collaboration framework (28%) intro Section Challenge 2 Generating a sustainable level of trust among strategic partners (22%) 1 Section 2 Challenge 3 Establishing buy-in internally for Open Innovation (20%) Section 3 Challenge 4 Creating a shared understanding of the problem to be addressed through Open Innovation (25%) Section 4 Section 5 Survey Question: Please rank the following Open Innovation challenges in order of importance .The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  23. 23. growth team m e m b e r s h i p™ 2011 survey results 23 The challenges of Open Innovation are consistent across business models but ranking varies Top Four Challenges of Open Innovation (By Business Model) B-to-B B-to-C Hybrid intro Overcoming the fear of lost Creating an effective Open Establishing buy-in internally Challenge 1 IP and competitive advantage Innovation collaboration for Open Innovation (33%) (31%) framework (26%) Section 1 Challenge 2 Generating a sustainable level of trust among strategic partners (20%) Creating an effective Open Innovation collaboration framework (13%) Generating a sustainable level of trust among strategic partners (24%) Section 2 Challenge 3 Creating an effective Open Innovation collaboration Generating a sustainable level of trust among strategic Establishing buy-in internally for Open Innovation (27%) framework (22%) partners (43%) Section 3 Creating a shared Creating a shared understanding of the Overcoming the fear of lost understanding of the Challenge 4 problem to be addressed IP and competitive advantage problem to be addressed through Open Innovation (50%) through Open Innovation Section (26%) (23%) 4 Section 5The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  24. 24. growth team m e m b e r s h i p™ 2011 survey results 24 Crowdsourcing is used primarily to develop initial ideas for innovation Crowdsourcing in the Innovation Lifecycle (By Business Model) 40% 37% 33% 33% intro 28% 27% 24% Section 21% 1 The red percentages are 20% for all respondents . 18% 16% Section 13% 2 9% 10% 9% 7% Section 6% 6% 3 0% Section Idea Generation Idea Screening Concept Testing Product Launch and Development 4 All Companies B-to-B Companies B-to-C Companies Hybrid Companies Section 5 Survey Question: Please indicate if your company uses crowdsourcing in the following product/service development activities (click all that apply) .The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  25. 25. growth team m e m b e r s h i p™ 2011 survey results 25 Respondents in B-to-C companies employ specialized vendors—such as Six Sigma—for crowdsourcing Crowdsourcing Tactics (By Business Model) 90% 88% 89% intro 60% Section The red percentages are 1 for all respondents . 43% 36% 38% Section 34% 33% 32% 2 30% 25% 20% Section 12% 3 13% 8% 5% 4% 7% 8% 6% 4% 0% Section 0% Formal Networks Open Networks (e.g. Customer/Consumer Public Contests Social Media 4 Six Sigma) Surveys, Focus Groups, or Workshops All Companies B-to-B Companies B-to-C Companies Hybrid Companies Section 5 Survey Question: Please indicate the types of Crowdsourcing your company uses in its product development process (click all that apply) .The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  26. 26. growth team m e m b e r s h i p™ 2011 survey results 26 what’s keeping r&d/innovation and product development executives up at night in 2011? The Top Overarching Challenges Affecting R&D/Innovation and Product Development Executives Overarching Challenges Sample Solutions from the Growth Team Membership Assessing New Product Ideas Learn how our New Product Development toolkit Staffing limitations and increasing demand for new intro enables strategic analysis of all factors that could products and services require R&D/Innovation influence demand for new products/services and executives to develop a system to examine and examines operational and organizational potential prioritize ideas and projects based on their to support the development and launch of an Section potential value . innovation concept . 1 Voice of the Customer Section Learn how Tandberg used customer-segmentation to 2 R&D/Innovation executives have to develop products embed the voice of the customer in its innovation that address unmet customer needs . process . Section Collaborative Innovation 3 R&D/Innovation executives seek to use collaborative innovation with external parties—particularly for Learn how IBM implemented a collaborative innovation program to test early stage innovations ideation and concept testing—yet struggle with Section and speed the innovation commercialization process . implementing a collaborative innovation process . 4 Section 5 The Growth Team Membership™ (GTM) is an annual subscription program that supports executives in Marketing, Sales Leadership, Corporate Strategy, Corporate Development, R&D/Innovation, Market Research, and Competitive Intelligence . GTM offers best practices research, events, and services to address the internal challenges executives face . Contact us at GTMResearch@frost .com .The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  27. 27. growth team m e m b e r s h i p™ 2011 survey results 27 intro Section 1 Section 2 Section 3 Section 4 Section 5 Respondent DemographicsThe contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  28. 28. growth team m e m b e r s h i p™ 2011 survey results 28 Respondent Demographics Enterprise Type Business Model Venture Capital The majority of the The majority of the 6% Hybrid respondents work in respondents work in Company a private company . B-to-B companies . Public 30% 43% intro Private B-to-B 51% 61% Company 9% B-to-C Company Section 1 N = 179 N = 179 Section Company Revenue 2 60% Section 3 36% 28% 30% Section 4 12% 7% 14% Section 0% N = 178 Below $100 Million to $500 Million to $1 Billion to More than 5 $100 Million $499.99 Million $999.99 Million Survey Question: Please indicate the type of enterprise best represents your company . $11 Billion $11 BillionThe contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.
  29. 29. growth team m e m b e r s h i p™ 2011 survey results 29 Respondent Demographics: Region and Top Six Participating Industries Industries Region Asia Pacific 1% Middle East 2% 1% Other Automotive and 14 % Transportation intro Energy and Power 14 % Systems Section 49% Americas 1 Environmental and Building Technologies 14 % Europe 47% Section 2 Healthcare and Life Sciences 22% Section N = 179 3 Chemicals, Materials, and Food 25% Section Information and 4 Communication Technologies 26% Section 0% 10 % 20 % 30 % 5 N = 179The contents of these pages are copyright © 2011 Frost & Sullivan. All rights reserved. Source: Growth Team Membership™ research.

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