Subsea UK chief executive Neil Gordon said capital expenditure cuts and low crude price were starting to bite.
But he added that the fundamentals of the sector, which supports 60,000 jobs, remained relatively strong.
He was speaking at the start of Subsea Expo in Aberdeen.
Subsea firms play a key role in North Sea activities, which have been coming under pressure following a sustained fall in the price of oil.
This week accountants PwC said many oil and gas firms would need to transform the way they operate in order to grasp future opportunities in the sector.
Its report argued companies should be looking to deploy fresh strategies, including looking to reduce costs "in a sustainable manner".
Mr Gordon told delegates at Subsea Expo: "The UK's subsea sector came out of a strong 2013 to a relatively flat second half of 2014.
"The existing order book kept the industry going but, as this dries up and projects are abandoned or postponed until the oil price recovers, we are in for major challenges."
Mr Gordon said research suggested that overall capital expenditure growth forecasts should start to become more positive after 2016.
He continued: "It is therefore imperative that during this period Subsea UK demonstrates strong leadership by pushing the industry to more quickly adopt innovation and technology.
"We need to better explore how projects are currently delivered and then make the step-change to deliver major efficiencies.
"While subsea companies must speed up the development of new technologies, the industry must be prepared to embrace new technology.
"It has to become less risk-averse and more receptive to supporting field trials and implementation of new technology."
Subsea UK is urging companies to turn to the National Subsea Research Initiative, which brings academia and industry together to collaborate on getting new technology to market much more quickly.
NSRI will be focusing new research and development on a number of themes, including decommissioning methods and techniques, well intervention and small field cluster development.

Doctors said Oshin Kiszko should undergo chemotherapy and radiotherapy to treat his malignant brain tumour.
But his parents, Angela Kiszko and Adrian Strachan, refused treatment because of the severe side effects.
After a court decided in March that Oshin had to receive chemotherapy, a judge in September ruled he could be given palliative care.
The Perth boy died early on Wednesday morning, his mother confirmed to local media.
"My love Oshin took his last breaths peacefully as I lay cuddling him at 2am," Ms Kiszko told Seven News.
"Oshin's journey has been extraordinarily traumatising for him and I am grateful he no longer needs to suffer through this nightmare."
The legal fight began after Oshin underwent brain surgery at Perth's Princess Margaret Hospital in December 2015.
Doctors recommended follow-up chemotherapy and radiotherapy, but Oshin's parents believed the side effects would ruin his quality of life.
"I thought I could not put myself through it. Why could I put my son through it?" Ms Kiszko told Nine's 60 Minutes programme in April.
Doctors took the matter to the West Australian Family Court, which ruled in March that Oshin must undergo chemotherapy.
At a hearing in May, the court heard evidence that the boy would have at least a 30% chance of survival if he received both chemotherapy and radiotherapy.
The matter was adjourned when Ms Kiszko and Mr Strachan committed to continuing chemotherapy only.
In September, a judge ruled Oshin's cancer was so advanced he could be given palliative care.
A court statement at the time said "specialist medical opinion confirmed that the delay in therapy had substantially reduced Oshin's chances of a cure, which are now remote".
The UK's subsea sector is in for two years of tough times and will only weather the storm if it embraces innovation and new technology, an industry body has warned.
[NEXT_CONCEPT]
A six-year-old boy whose cancer diagnosis sparked a high-profile legal battle in Australia has died.