Domestic R&D spending by all U.S. companies fell 13.1 percent, to $233.92 billion, in 2008, the most recent year for which data are available, from $269.27 billion in 2007, according to the National Science Foundation. (Including R&D paid for by other U.S. concerns, but performed in U.S. companies' domestic locations, spending rose to $283 billion in 2008 from $269 billion in 2007, according to the NSF.) During the prior recession, which was far milder, domestic R&D spending was down 0.5 percent, to $198.51 billion, in 2001 from $199.54 billion in 2000.R&D budgets have actually INCREASED through the downturn!
Yet even amid the sharpest economic downturn since the Great Depression, the 232 companies in the Standard & Poor's 500 index for which data were available increased their aggregate research and development expenditures to $163.37 billion in 2008 and $166.42 billion in 2009 from $154.44 billion in 2007, before the recession began, according to Bloomberg data. (Of those 232 companies, 115 spent more on R&D in both 2008 and 2009 than they did in 2007.)Even so, R&D seems to have been moved towards nearterm maintenance and away from invention/innovation.
Total utility patent applications—covering inventions and excluding patents for ornamental design of manufactured goods—have stayed flat at around 456,100 for the past three years, while total utility patent grants have been frozen at around 167,300 per year since 2002, according to data on the U.S.Patent & Trademark Office's website.3M has cut R&D budget but not heads by eliminating bonuses.
Cuts in R&D may not signal a reduced commitment to innovation. Even outfits noted for their heavy emphasis on R&D, such as 3M (MMM), have pared their R&D budgets since before the 2008-09 recession. (3M's $1.29 billion R&D budget in 2009 was down 5.8 percent from 2007.)Dow maintains 20% of its R&D budget (see below) for innovation projects whose ROI is difficult to measure.
Dow's $1.49 billion in R&D spending in 2009 represented a 14.6 percent increase from 2007, while revenue fell 16.1 percent over the same period.P&G has been flat over the period, but they are increasing focus on accessing innovation from the outside:
P&G's R&D spending was nearly $2.0 billion in fiscal 2010 (ended June), up from $1.95 billion in fiscal 2008, when adjusted to exclude its pharmaceuticals unit sold in October 2009. Net sales—adjusted for the disposal of the pharmaceuticals business and the company's coffee business in November 2008—fell 0.4 percent over the same period.Monsanto has formed a strategic allinace with BASF to gain more leverage from R&D - helping them relatively cut R&D budget even though their revenues have actually incresed through the downturn.
Monsanto's total R&D spending reached $1.1 billion in 2009, up 14.2 percent from 2007, vs. a 40 percent increase in revenue over the same period.)Here are some others:
Danaher's R&D budget rose 5.2 percent from 2007, to $632.65 million in 2009. Danaher has doubled its R&D spending as a percentage of sales over the past 10 years, to about 6 percent in 2010, even as its total revenue has tripled over that same period.
[BHI] The oilfield service company's R&D budget climbed 6.7% from 2007, to $397 million in 2009, despite a 7.3 percent drop in revenue over the same period.