The results of a quarterly "Fast Track Leadership" survey of business professionals released today suggest that China and India are likely to gain significant market share from the US in the information technology, automotive and Internet sectors.

Further, the vast majority of survey respondents (81.1%) believe the US needs to develop policies to increase its number of graduates in engineering and science to maintain its innovative competitive edge against other countries.

The survey, conducted in October 2005 by IMD MBA, Fast Company magazine and Egon Zehnder International, includes responses of 1,962 business professionals in the US and abroad who were asked online quantitative and qualitative questions about the relationship between innovation and business performance. The survey's findings are being published in Fast Company's December issue, now on newsstands, and will be available online at www.fastcompany.com by December 5.

Inroads Against US Market Share

Following are the percentage of respondents who said that they strongly agree or agree with the statement: "China and India's innovativeness is likely to lead to significant market share gains (relative to the US) in several industries."

                                                                China          India
                                                                     -----          -----
   Information Technology                    62.4%          85.7%
   Automotive                                           53.9%          12.6%
   Biotechnology                                     37.9%          47.6%
   The Internet                                          35.7%          61.4%
   Medicine                                              29.3%          43.7%
   Entertainment                                     14.6%          23.7%

In addition, more survey respondents agreed (46.6%) than disagreed (27.5%) or held a neutral view (25.9%) that MBA students should pursue jobs in China, India or other fast-emerging markets to advance their creative and innovative talents. Further, most agreed (74.5%) that in today's global market innovation can and should happen anywhere in the world and that US companies should worry less about international rivalry and focus more on where to get things done (74.5%).

Most Admired US Innovators

When asked to name a company they admire for its innovation and creativity, respondents most frequently cited the following companies in this order:

   1. Apple Computer                   6. Microsoft                
   2. Google                                    7. Dell                      
   3. 3M                                            8. Target                    
   4. General Electric                    9. Starbucks                
   5. IDEO                                      10. IBM, Southwest Airlines  

When respondents were asked why they identified a company as being innovative, the most common reasons cited were:

   * "Continuous innovation and quality products; company stays on the cutting edge."
   * "Listens to customers and meets their needs; focuses its creativity on making business better."
   * "The company's culture fosters innovation and creativity."
   * "Created a new market; transformed their industry."

Innovation's Key Benefits

Respondents were asked a series of open-ended questions for their views of why a company was admired, how they define innovation and creativity, and what encourages workplace creativity.

When asked to describe the role that innovation plays in their work environment, many respondents said that innovation and creativity are not limited to generating new ideas. Creativity requires fostering the right work environment, enabling employees to listen to customers and creating ideas that work, and responding with solutions to meet the real needs of customers and the marketplace.

According to the survey, the three key benefits of innovation and workplace creativity that respondents consistently cited were:

   * Organizational support and company culture. It is important to foster a workplace culture of creativity and innovation that encourages risk and supports failure, empowers employees, and encourages new, fresh ideas and out-of-the-box thinking. The freedom to succeed or fail and freedom from company politics and bureaucracy should be an important part of workplace culture.
   * Customer focus. Listen to customers and develop solutions that fulfill customer needs.
   * Continuous innovation with ideas that solve company or customer problems. Consistently create new, quality products to keep a company on the cutting edge and create new markets and transform industries. Techniques such as brainstorming, debate, and questioning may help generate these ideas. Focus on creating solutions to company or customer problems.

Sources of Workplace Creativity

Respondents were asked to identify those company departments where creativity is most often found. Their responses (% who agree / strongly agree):

   Marketing                                           69.4%
   R&D / Product Development         62.9%
   Customer Service                            60.4%
   Sales                                                  52.7%
   Senior Management                        52.0%
   IT                                                          50.2%
   Purchasing/Sourcing                       34.4%
   Manufacturing                                     29.4%
   Finance                                                25.4%

When asked about the level of innovation and creativity in their company and their job, more than 50% of respondents agreed that:

   * My job requires innovation / creativity (93.4%);
   * The chance to be creative is a key part of my job motivation (85.4%);
   * My company values innovation / creative ideas (76.9%);
   * My company encourages employees to use their innovative and creative talents (68.5%);
   * My company is innovative (62.0%);
   * My company culture fosters creativity and innovation (54.5%).

Respondents who indicated that their companies value creativity and encourage it among employees were more likely to agree that creativity is found in all parts of their organization.

Internal Drivers of Workplace Innovation

When asked what produces creative ideas or innovations within a company, more than 50% of respondents agreed that:

   * Workers are most creative when they care about their work and stretch their skills (93.5%);
   * Cross-functional teams best drive innovative results (85.5%);
   * Outsiders seeing a problem with fresh eyes generate creativity (83.7%);
   * Reducing the consequences of failure increases creativity (77.5%);
   * Creative ideas come from teams assembled from many different geographies within a multi-national organization (61.6%).

Only 41.7% of respondents said they agree that confrontation within a team facilitates creativity.

External Drivers of Innovation

Respondents said they strongly agreed or agreed that the following external sources drive innovation and make a contribution to their company's creativity:

   Customers                                     78.7%
   Competitors                                   75.4%
   News Media                                   64.3%
   Suppliers                                        49.5%
   Industry/Trade Associations       48.2%
   Consultants                                   46.8%
   Universities                                    44.3%
   Government Organizations         13.0%
   Legal Advisors                               10.6%
   Banks                                              7.3%