NASSCOM 2007: Innovation is more than R&D spend

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If businesses want to unleash their innovative potential and enjoy the associated competitive advantages, they need to realise that it is no longer enough to simply plough additional funds into research and development (R&D), according to a leading research analyst.

Companies must alter their mindset to avoid confusing innovation with invention, leading them to invest more in R&D and churn out more products, Navi Radjou, vice president of Forrester Research told delegates at the National Association of Software and Services Companies (NASSCOM) India Leadership Forum in Mumbai, India this week.

"Clearly innovation is a hot term in the industry right now," he said. "But if you innovate in the wrong way there is a danger that you can get sucked into the black hole and once you get sucked in it is very hard to get out.

"You have to unlearn bad habits. A lot of companies have tried innovation by investing in R&D and other initiatives. But when I ask for an [innovation] metric I always get told how much they've invested in R&D. Also, in the technology sector, innovation is seen as something you do on your own, a family secret."

Customers, competitive and compliance-related forces are all placing pressure on businesses to innovate, so this increased focus on R&D isn't helping to meet that demand, claims Radjou.

Radjou cited BT as a good example of a company who has got the balance between the two sussed. The telco is believed to benchmark itself against the likes of Google rather than BT's traditional competitors.

"BT has recognised the need to innovate not just its technologies but its business model too in order to be successful," he said.

"Don't just think about innovation from your perspective as innovation is in the eye of the beholder, which is the client. And they are getting more sophisticated in terms of innovation needs. Having the skills set in your organisation to understand and meet these needs will be very important."

Employees will be critical to organisational innovation and should be encouraged to come forward with ideas without fear of comeback if they don't always succeed, agreed other conference speakers from Mastek, Symantec and Zensar.

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