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Archive for December 3rd, 2013

CINO: solves Big R&D Talk, but Little ROI Walk

Tuesday, December 3rd, 2013


When it comes to high-tech, it’s not just those who hang out in Silicon Valley whose sacrifices at the Alter of Innovation must be generously funded and then widely touted. Captains of high-tech industries everywhere must spend oodles on R&D and then brag about it, year in and year out, regularly releasing their R&D budget numbers so people (particularity stockholders) can sense the true scale of the organization’s commitment to the Great Cult of Innovation.

It turns out, however, it’s easy to talk the talk, but much tougher to walk the walk.

It turns out – even though of late, companies like IBM have put up annual growth numbers in the range of 40% and Apple’s have been almost double that – over the last 40 years, actual growth rates in high-tech have been measurably less than growth rates across non-high-tech industries. And this, despite the fact that R&D budgets in high-tech have persistently been 75% bigger, as a percentage of revenue, than R&D budgets for their non-high-tech sector counterparts.

Are you following this? In other words, the ROI on R&D in high-tech – the amount of growth that has resulted from all of that R&D investment – has been shockingly low, and it’s not just because various markets for high-tech goods are saturated.


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