There is no shortage of activity in the IT industry, but much of this is simply adding bells and whistles to existing inventions. Large software companies such as Computer Associates apparently spend huge sums on R&D, but much of this is consumed by the need to maintain and upgrade a large portfolio of software products.
So is software engineering reaching a kind of innovation plateau? Eric Newcomer of software firm Iona thinks so. "I think we are entering a phase of refinement rather than innovation. The most significant innovations are over."
Paul Brown of software firm FiveSight half agrees. He suggests we may be reaching a phase where the remaining questions are either trivial or imponderable. However, he makes an important distinction between software technology and software practice; he argues that software practice is primitive and largely unsupported by science. (I agree.) He suggests that the first open problem to solve may be to find a way to marry entrepreneurship with the economic and intellectual climate to create the next kind of innovation.
If we try to measure innovation in terms of product features or patent applications, we may be unable to differentiate between the trivial and the significant. This already happens to some degree in pharmaceuticals, where drug companies often spend fortunes trying to make trivial changes to existing products, simply in order to have something new to patent and sell. (A so-called innovation here may consist of a slightly different molecule with almost indistinguishable medical effects.)
We haven't quite reached this stage with software - but it may be coming closer ...
See also note on Innovation or Refinement?