R&D 2004 scorecard

The December issue of the MIT technology review has it's annual edition of the R&D scorecard. Severral interesting points can be found inside the mass of raw data:

• The study only covers internal innovation, and does not touch on external outsourced innovation which is then folded into the core group though acquisition. A significant percentage of the M&A budget  should be allocated to that type of R&D. Open innovation covers this phenomena in great depth.
• Europe with 33% of the companies with the highest R&D spending and Germany with 3 of the top-15 (Daimlerchrisler, Siemens, Volkswagen) have a strong position in the index.
• Research is consolidation in most industry with a huge gab between the budget of the first player in one industry and the second one. here again, i suspect that we would find again a U shaped curve discribing the  overall R&D spending as function of the size of company, with a lot of R&D, VC funded at the low end (afterall 700M€ was invested by VC just in Europe in Q3), and a strong spending on the high end by the number 1 and 2 player in each industry.
• With a ratio of 18% of R&D to sales, the software industry is and remains innovation driven (this need to be linked to an overall market size of 200B$ and a CAGR of 6% as per some recent IDC study). Computer hardware is at a ratio of 7% (more mature dell-ified industry), and semiconductor at 22% (huge R&D barrier to entry), ratio significantly higher than in any other industry.

Those numbers can also be put in context in the old (but still very relevant) study from the French ministry of finance of strategic technologies 2005 which has a large section on IT innovation (sorry it's in French...).

Comments

[Laurent Simon]

Fortunately it's in French :-;