Climate for Innovation On the Rise

April 9, 2009  

According to a recent study by Chuck Frey at, 47% of companies say that the climate for innovation has “improved slightly or significantly” since the onset of the global recession.  In fact, only a quarter of the respondents felt that the climate for innovation has deteriorated.

Surprisingly, only one third of the companies say they cut investments in innovation.  37% have kept funding steady while 29% have increased funding.

However, as I suspected, those innovation investments are now being channeled into things other than new product development.  The top 5 innovation strategies are:

  • Looking for creative ways to improve or extend your existing products (50.9%)
  • Looking for opportunities to improve collaboration (47.2%)
  • Increasing focus on changing customer needs (39.8%)
  • Focusing on service innovation (38.1%)
  • Focusing on process innovation (36.4%)

Most of the innovation dollars are being funneled into getting more out of existing products, while increasing efficiency and service levels.

The one thing I did not find in the study is if companies, as part of their efforts to “improve or extend” existing products are using “simplification” as method of increasing marketshare.  To learn my perspectives on this, read about the “innovation bell curve.”  This is an overlooked opportunity to gaining marketshare by leveraging your existing offerings.

You can read the full report on  This is an interesting report and offers hope for those who believe that innovation is the answer.

Having said that…

It is important to point out that studies like these are inherently biased and are not statistically accurate as the respondents are not randomized.  The companies who participate tend to be connected to the surveyors in some (albeit indirect) way.  Therefore those organizations are thinking about innovation more than others.

When I was recently asked what morale was like at my clients, I said “challenging yet optimistic.” But my client list is not representative of the norm.  Anyone who hires me is clearly still investing in innovation and continues to see its value.

Therefore, when reading this, focus more on the qualitative aspects rather than the hard, cold numbers.  There are interesting insights to be found.  And maybe there is even a ray of optimism shining through the cloudy economy.

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  1. Arjan`s World » LINKBLOG for April 9, 2009 on April 9th, 2009 1:42 pm

    [...] Climate for Innovation On the Rise – Stephen Shapiro ‘ (…) the climate for innovation has “improved slightly or significantly” since the onset of the global recession ‘ This is news that we all are waiting for eagerly; now to see if it becomes reality [...]