Necessity is the mother of invention - the saying was born way before Google. But Google's VP for search products and user experience ,Marissa Ann Mayer says here Google believes that constraints create more creativity in its teams. Constraints like its toolbar cannot exceed download size of 625K. Team size of 3 or less. A week of prototyping before an idea is taken forward or discarded. Not earth shattering but a very good read for anyone looking for clues to Google's innovation culture.
Not everyone thinks every thing Google introduces is innovative. James Governor here picks on their Blogger product. And over the weekend Robert Scoble of Microsoft asked " I wonder how many other ideas we have that Google will get credit for?"
Nonetheless, her ideas around constraints are something others have validated. John Hagel has an interesting post followed by comments around studies McKinsey, Booz Allen have done around why large R&D does not always equate to Innovation. So does this article -Money Isn't Everything.
The Big 4 software vendors spend over $ 10 b in R&D. Google and a number of CIOs I have written about in this category innovate much more with far fewer zeroes. With lean, mean teams.