Innovation in the Engineering Services Industry - ARCHIVED

Rapid technological change and an emerging global marketplace underscore the need for firms to innovate in order to succeed. The 1997 Survey of Innovation was the first to look at innovation in selected knowledge-based and information-intensive services industries. This article presents estimates of innovation in the engineering services industry over the 1994 to 1996 period. The survey findings show that large firms are very innovative, but that innovation rates are low among small firms. Further, firms that do not innovate are less likely to try because of the risks inherent in innovation activity. Product innovation is the most common of the three types of innovation studied. While organizational change usually leads to innovations yielding new products and more efficient processes, it is the least common form of innovation. Firms cite their clients as being their most important source of innovative ideas, and also acknowledge the importance of research and development (R&D). Firms perceive that market uncertainties and difficulties in obtaining capital are their most significant barriers to innovation.