Despite Downturn, Executives Cite Increasing Need for Product and Service Innovation, According to Frost & Sullivan Survey

MOUNTAIN VIEW, Calif. - Based on a recent survey of innovation and product development executives at North American companies, Frost & Sullivan, the Growth Partnership Company, finds that the primary business environment factors shaping innovation and product development strategy are the increasing need for product or service innovation (48% of survey respondents) and the global economic downturn (33%).

Other business environment factors identified were increasing demand for green or sustainable initiatives (25%), intensifying competition (24%) and emerging global markets (20%).

The survey, conducted by Frost & Sullivan’s Growth Team Membership™ executive development program, sought to better understand the business environment factors and the key challenges facing innovation and product development executives in North America in 2009.

Survey respondents also identified the most pressing challenges facing their job function. The top four are: generating and maintaining a pipeline of commercially viable innovations (21%); implementing customer value-driven innovation (17%); identifying and developing breakthrough innovation ideas (13%); and allocating portfolio spend across existing, next-generation, and breakthrough projects (13%).

“The data highlights that although the economic downturn is a prominent concern in product development, the pressure to create and sustain improved products and services is still the top priority for executives and companies,” explains Keith O’Brien, Senior Director of Global Research for Frost & Sullivan’s Growth Team Membership program.

Development executives also seemed to display a rather balanced opinion of their work. Forty-one percent (41%) of respondents rated their development function’s effectiveness as “Average” and 40% rated it as “Above Average.” Remarkably, only 10% of respondents cited their work as “Exceptional.”

More than half of the survey’s respondents work in Healthcare and Life Sciences or Information and Communication Technologies companies. The largest set of respondents works in companies with revenues of $1 to $11 billion (30%).

For more information on this survey and the prominent issues in innovation and product development, please contact Jake Wengroff, 210.247.3806, jake.wengroff@frost.com.

Frost & Sullivan’s Growth Team Membership™ is an annual subscription program that supports the individual members of a CEO’s executive team in achieving the company’s top-line growth objectives. The membership includes career-focused events, implementation-oriented best practices research, and targeted services. A Growth Team Membership will speed the design and implementation of a company’s growth initiatives (avoid reinventing the wheel); reduce risk by avoiding pitfalls encountered by peers; stimulate problem solving through a cross-industry perspective; improve an executive’s contribution to the CEO’s growth agenda; and accelerate the executive’s professional and career development.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company’s Growth Partnership Service provides the CEO and the CEO’s Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 31 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.