Survey: U.S. Spending Least on IT ‘Innovation’

With IT budgets on near-lockdown thanks to the recession, tech professionals around the world are struggling to find new ways to develop and refine new offerings.

The trick is how to keep innovation going under the current tight budgetary situations, so that IT shops can capitalize on a rising economy when the recovery begins in earnest. There’s a wide difference in how IT executives of different countries are choosing to spend their precious resources — and according to new research, the U.S. is spending the least on the future.

According to a survey conducted by Harris Interactive, simply “keeping the lights on” — financing core operations — eats up well over half of IT budgets.

Japanese and U.K. IT pros said their remaining budgets allow them to spend 41 percent on innovation, followed by German IT pros, with 35 percent.

In contrast, U.S. IT shops have only 29 percent to spend toward advancing their companies’ competitive edge.

On average, the four nations’ IT pros target 37 percent of their budgets toward innovation. However, only 22 percent of the respondents cited efforts to get a competitive edge as their top priority.

For IT vendors like Microsoft, which sponsored the study, it’s important to encourage customers to continue spending on new projects, products and services — which means more sales for the IT vendors in the process.

But 51 percent of the 1,200 IT pros in the U.S., U.K., Germany and Japan surveyed by Harris Interactive reported that budget constraints are the chief barrier to innovation. Fifty-five percent of IT professionals said that the recession is even redefining the entire role of IT.

“We are definitely seeing the impact of the economy on IT innovation,” Bob Kelly, corporate vice president for Microsoft infrastructure server marketing, said on a conference call with press Tuesday.

It’s an impact in the making since late last year, when crashing budgets began forcing IT shops to reconsider their budgetary priorities.

Still, Kelly urged IT pros to continue investing in innovation in order to be better positioned when an upturn in the economy does kick in.

“Companies that make smart investments in IT will gain a foundation for their business that empowers innovation, boosts productivity and, ultimately, helps improve the bottom line,” Kelly said. “Investing in IT is a path to success, now and in the future

Kelly pitched Microsoft’s products and services as part of the solution to the current situation — particularly in the areas of virtualization, security, and datacenter consolidation and cloud computing. Among those are Windows Server 2008 and the System Center management tools.

[cob:Special_Report]”We’re the ‘do more with less’ company … helping drive costs out of ‘keeping the lights on’ … and into innovation,” Kelly said.

There’s some reason for optimism. Almost two-thirds of respondents view the economic situation as “an opportunity for more investment in one or more technologies,” Microsoft said in a statement.

But some areas of investment are likely to get a colder shoulder than others. The effect of budgetary restraints on important strategic initiatives like switching to energy-saving green technologies, for instance, can be a mixed blessing.

“Eighty-four percent of IT professionals consider green factors when making decisions about datacenters,” but green initiatives play a role in the final decision only about 44 percent of the time, Microsoft said in a statement.