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Thursday, October 13, 2005
Innovation critical to competitive edge
LOOKING for a competitive edge? Don't forget the critical importance of innovation.
That is the perspective majority of business and technology leaders share, according to a recent study.
The Cisco Innovation 2005 Survey, conducted by the independent research firm Momentum Research Group, reports that business and technology leaders cite innovation as the most critical factor in their companies' success.
More than half of the 635 executives interviewed selected increased innovation over better education, reduced wages or reduced corporate taxes as the key to increased competitiveness. Improved education ranked second.
Innovation is considered to be more critical in the manufacturing industry than in construction, education, government or other sectors. And the more innovative respondents consider their own firms to be, the more they want to increase the rate of innovation or increase employee education.
"The economic benefits of innovation, which include greater productivity and leadership in new markets, are what will help ensure that global economies maintain their competitive edge," said Cisco Systems President and Chief Executive Officer John Chambers.
"As countries, companies and even individuals make choices about where to invest, these results underscore the role innovation has in driving global competitiveness at all levels within an economy, from the government to education to private business," Chambers added.
Respondents believe that customers and senior management are top drivers of innovation and that it is not surprising, according to Jay Shutter, Managing Director, Momentum Research Group.
"Today's increase in information availability and the emergence of global markets have driven an ever greater focus on the customer," Shutter said.
Just as innovation is driven by certain factors, executives also cite a number of barriers to innovation, ranging from regulatory issues to market risk.
A third of respondents overall chose organizational issues as the biggest obstacle to innovation although individuals from enterprises see this as a bigger problem than respondents from small and medium-sized businesses do. For small firms, investment cost ranks as the second strongest barrier to innovation.
Innovation Comes in Many Forms
Of course, it's one thing to recognize the importance of innovation, but it's another to determine, which business areas make the best targets for a company's investments and energy.
Respondents expect their organizations to focus innovation on an average of two key areas over the next 12 months. But there's no consensus as to where those efforts should be focused.
For example, relationships (customer, supplier, employee), product and service quality, operations and product and service development were all cited quite highly.
Improving communication and integration among key constituencies has the potential to have a significant impact on global innovation and competitiveness, according to those surveyed.
For Bisaya stories from Davao. Click here. (October 13, 2005 issue)
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