Innovation seems to be a buzzword at the moment. Attendees at a food conference in Dublin this week heard how innovation and technology are expected to be the "driving force" in realising the potential of the Irish food industry, and next week a gathering of company executives at the CEO Forum in Dublin and Cork will discuss the importance of innovation in the development of the State's indigenous firms.

"Innovation is essential for success," says Paschal McGuire, spokesman for Enterprise Ireland which, along with Deloitte, is sponsoring next week's event. "Without it, Irish companies won't be able to compete on a worldwide scale."

According to McGuire, competition is tough and companies need to be developing new products and solutions continuously.

Helen Ryan, chief executive of Irish group Creganna Medical Devices and one of the speakers at the forum, agrees. "Without it you're not going to grow, and standing still is the best way to move backwards," she says, adding that innovation is not just about new product development.

"It's about acknowledging that things can be improved and being open to change," says Ryan, who as head of a company that operates in the fast-paced pharmaceutical product sector, is conscious of the need to adapt. "We are always looking at how we can improve things . . . whether it be the way we supply a product to a customer or the way a particular item is produced."

Ryan is also quick to point out that innovation is not simply about research and development (R&D). "This categorisation can be misleading and particularly off-putting for smaller companies. R&D immediately implies the need for a lot of financial input, and that's not always the case."

Still, she does advise that companies set aside some of their budget for innovation.

While innovating may be easy in a constantly changing sector, it is important that businesses in more developed sectors don't stand still, says Ryan.

She advises that if your business isn't in a natural growth cycle, you should still look to innovate by imagining the worst-case scenario and doing something radical to help drive your business forward.

A Forfás survey found that, between 2002 and 2004, just over half of all companies were classified as innovation active, a figure that must increase if Irish firms are to compete internationally.

n This year's CEO Forum will take place next Wednesday at the Leopardstown Pavillion in Dublin and next Friday at the Radisson SAS Hotel in Cork.