FPGA journal has good article on Innovation in EDA industry. First chapter shows work culture difference between a startup company and a big company. Notably, big companies have too many hurdles to foster innovation.

Innovation in a startup is drop-dead easy. In fact, it's almost impossible to avoid. Filled with energy, entrepreneurial spirit, and the promise of life-changing rewards, engineers unencumbered by corporate policy, practice, and red tape are capable of almost unbelievable creative productivity. Startups are the engines of technical innovation.

Innovation in large companies, on the other hand, is almost impossible to foster. The Chucks of the world have almost no tangible connection to the fate of their large corporation's business ventures, and they participate only tangentially in the rewards of its success. They tend to avoid taking the risks required for true innovation, because the costs of failure in a big corporation far outweigh the potential rewards of success.

Second chapter analyzes some of the big & successful EDA companies where spirit of innovation is still thriving.. especially note on Mentor Graphics in Chapter 2.

Mentor frequently fosters situations where multiple product development efforts take different approaches to attack the same market. "In our business," Rhines observes, "the cost of developing a new product is relatively small compared with the cost of broad distribution and marketing. We've learned to take advantage of that. In many large companies, there is always a drive for a single strategy and a single product to address a market need. New development is cut early if it doesn't fit the initial vision. The problem with that is that markets change, customer needs change, and the best solution may not be the one that appeared best in the early going. We decided to move the boundary. Instead of killing projects early, we let them continue and even test with a few customers. Then we get very tough. We don't go with broad distribution until the product is proven to be a success. Because of the cost difference, we could do five or ten projects to the prototype stage for each one we take all the way through to broad distribution."

Over all Good Read!! Links are provided below

Innovation Big and Small - Chapter 1

Innovation Big and Small - Chapter 2