Blogs are strange beasts, with the informality of a conversation, but the durability (and searchability) of any information published on the web. Since my blog last week - in which I quoted the statistic that 95% of product costs are fixed at design stage - I've been consumed with guilt that I didn't provide more information about that statistic.

It’s struck me that my blog is now permanently part of cyberspace (yeah, I know, but I'm still getting used to all this). All sorts of audiences might come across that statistic in the future and curse me for not having been more definite about my source. I promise not to be so cavalier in future.

I thought the most likely source of this data was the joint CIMA/Design Council funded research from John Innes and Bill Nixon, circa 1995. Although the report itself is not on our website (mid 1990s being virtually pre-history as far as web publication is concerned), Innes and Nixon wrote about their research for Management Accounting (now Financial Management) Sept 97 saying "One telling statistic is General Motor's calculation that 70% of the cost of manufacturing truck transmissions is determined in the design stage, and estimates for other products can exceed 80%".

Also Robin Cooper's book "When lean enterprises collide: competing through confrontation" (HBR, 1995) provides another source, saying "some authorities estimate that as much as 90 -95% of a product's costs are designed in".

In future, I think I’ll settle for saying “the vast majority of costs”. Anyway, it’s the significance of the statistic which is important - that it strongly suggests the necessity to involve management accountants from the early stages of product development.

Other interesting nuggets that I came across while researching innovation last week were that various world rankings for innovation suggest that the most innovative countries are:

Germany, followed by Japan, Switzerland, Sweden and Finland. These ratings are from the World Economic Forum’s Global Competitive Report 2008-2009, being an index of the capacity for innovation measured by the extent to which countries conduct formal research and pioneer the development of new products and processes. The USA ranked 6th, the UK 14th. If you want really detailed statistics, the OECD have a regularly updated database of Science and Technology indicators, which includes expenditure on R&D, numbers of researchers, state support or other resources devoted to R&D etc.

Looking at which companies are the most innovative, Business Week suggest Apple, Google, Toyota Motor, General Electric and Microsoft. If anyone has country-specific indices, I'll happily add more links but for starters, here's a UK one from the Department for Innovation, Universities and Skills. DIUS suggests the most innovative companies (well, the ones which spend the most on R&D) are GlaxoSmithKline, AstraZeneca, BT, Unilever, and Royal Dutch Shell. Those of you who have been following the banking crisis in the UK might be interested to note that Royal Bank of Scotland, just outside the overall top 5, was the most “innovative” of the banks. Hmmm.

Assuming most of my readers will be management accountants, if you’re at the heart of a significant innovation in your organisation you might like to consider entering the 2009 CIMA award for Innovation in Management Accounting. Entry is open to entries from all types of organisation, including not-for-profit and consultancies who have implemented innovations for their clients and the deadline is 24 July.