For many of the world’s top 150 technology companies, spending on research and development continues to take a beating. A quick scan of the R&D Corporate Scorecard reveals an abundance of negative numbers, especially in electronics and telecommunications: Ericsson, Lucent, and Nortel Networks have cut budgets more than a third, while Cisco Systems is down by a quarter. The semiconductor sector is also unsteady, with Intel’s and Texas Instruments’ expenditures flat.
The good news is that R&D spending as a whole is up more than $4 billion compared to last year, with bright spots in biotech and automotive. Spending by biotech companies has more than doubled, and automakers are shelling out $5 billion more for research and development than they did last year. In fact, Ford Motor and DaimlerChrysler rank number one and two among all corporations worldwide, laying out $7.4 billion and $6.4 billion, respectively.
A few of the unusually large increases in spending can be attributed to acquisitions. For example, Hewlett-Packard’s R&D expenditure jumped more than 53 percent after its merger with Compaq Computer in May 2002. Amgen is up 375 percent after buying Immunex in July 2002, and MedImmune shows a whopping 1,495 percent increase after its January 2002 acquisition of Aviron.
In total, the top 150 companies spent more than $236 billion on research and development. Ultimately, however, the success of R&D investment is best measured by the brilliant ideas coming out of corporate labs, so in “Seven Hot Projects,” Technology Review profiles some of the most promising technologies that will soon affect your life.
And while a prominent handful of companies continue their robust R&D spending, the general frugality is, some argue, beginning to hamper the innovation process. In “Our Innovation Backlog,” innovator and entrepreneur Kenan Sahin makes a strong case that although technological advances are continuing at a steady pace, there is often a failure to invest enough money to commercialize them. The result: an excess of great ideas gathering dust. Sahin lays out the problem and offers a few solutions.
Download the R&D Scorecard (Excel spreadsheet)