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October 12, 2005 | Comments: (0)
No connection between R&D spending and corporate performance
A study by Booz Allen Hamilton found that spending big bucks on research and development does not drive corporate competitiveness, earnings, or shareholder value. The reason: few companies have a fast or effective innovation engine.
The study realized that the top 1,000 R&D spenders increased their sum total to $384 billion in 2004, which is up 11 percent from 2002.
Related findings include:
-- Computing & electronics, health and auto constitute 63 percent of the total amount allocated to innovation.
-- Individual investments in R&D among the top 1,000 spanned the gamut from $39 million to the $8 billion invested by Microsoft.
The real surprise, though, is that Booz Allen Hamilton determined there are no quantifiable statistics that demonstrate a marked difference between the financial results achieved by companies it considers average R&D spenders, and those listed as above-average.
There were, of course, a few noteworthy exceptions, such as Apple Computer.
For more on the study, either follow this link, or you can download the PDF.
Posted by Tom Sullivan on October 12, 2005 06:44 AM
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