More than a third of respondents (37 percent) said they are counting on all employees, not just the head of science and technology, to advance innovation in their companies. Twenty-three percent of respondents felt that innovation is the responsibility of the chief technology officer.

Harris Interactive, Inc., on behalf of Dow Corning, conducted the global study. It involved a telephone survey of executives from a wide range of industries including electronics, construction, beauty and personal care, automotive, textiles, rubber, plastics, paper, and health care. Harris Interactive, based in Rochester, N.Y., is the 13th largest market research firm in the world and is widely known for The Harris Poll.

"The results show a trend away from the traditional 'inside-out' approach to innovation, which involves creating a new product or solution and then looking for a way to sell it," said Scott Fuson, global executive director for marketing, sales and customer service at Dow Corning. "Respondents now are turning to an 'outside-in' perspective of monitoring the external environment, market needs and customer expectations and then creating products, services and solutions to address those needs."

Respondents' ranking of factors that make a supplier a successful innovator reinforce this perception. The top-ranked factor was having an "intimate understanding of what customers want and need." This response scored 8.9 out of a possible 10 score, where 10 equaled extremely important and 0 equaled not at all important. The second highest response was "employees are creative," which scored 8.6, and third was "apply the latest developments in science and technology" at 8.5.

"Traditionally, company leaders felt that advancements in science and technology were primarily and almost solely responsible for innovation," explained Gregg Zank, chief technology officer and executive director of science and technology. "This result shows that respondents appreciate the significance of understanding customer needs first and foremost."

When identifying "the single biggest challenge facing your business today," 36 percent of global respondents indicated their top-ranked challenge is "lower-cost competitors." Other challenges identified in the global results, in order of priority, were new market development at 19 percent, innovation at 16 percent and rising energy costs at 13 percent.

Regional results showed marked variations. The challenge of lower- cost competitors is perceived as being more critical in Asia (36 percent), compared to 29 percent in the Americas and 29 percent in Europe respectively.

Thirty-two percent of respondents in Europe feel that innovation is by far the single biggest challenge facing their businesses today. Only 10 percent of respondents in the Americas and Asia named innovation as their top challenge.

"This mirrors feedback from the European Commission-sponsored Innovation Scorecard that tracks innovation progress in Europe," Zank said. "Commission officials have noted that innovation is critical to boosting growth rates and productivity in Europe."

For more information about the research methodology and results, go to www.dowcorning.com/content/about/aboutmedia/research_newletter3.pdf.