The left hand bandits
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The Left Hand Bandits. “R&D Spending Holds Steady in Slump”. R&D is Key. Major U.S. companies are cutting jobs and wages, but many are still spending on innovation

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“R&D Spending Holds Steady in Slump”

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The left hand bandits

The Left Hand Bandits

“R&D Spending Holds Steady in Slump”


R d is key

R&D is Key

  • Major U.S. companies are cutting jobs and wages, but many are still spending on innovation

  • Companies have learned from the past; innovation must continue through tough economic times if companies want to stay competitive in the long run

  • Today’s spending may produce key innovations for recovery


Recession innovations

Recession Innovations

  • Great Depression

    • 1933, Miracle Whip

    • 1937, Macaroni & Cheese

    • 1939, Nylon Stockings

  • Present

    • 2000, GE90 Jet Engine

    • 2001, iPod

    • 2003, iTunes Music Store

    • 2004, Motorola RAZR


Examples

Examples

  • Microsoft

    • 21% more 4th quarter spending

  • 3M

    • Laid off 4,700 workers/cut capital expenditures 30% yet keeping R&D constant

  • IBM

    • Plans to keep spending the same

  • Corning Inc.

    • Spending to develop better glass for solar energy systems


Not a sure thing

Not a Sure Thing

  • Investing dollars does not always insure successful products

  • Companies may not be able to sustain spending

  • Heavy spending does not necessarily mean jumping into brand new markets, instead improving existing products


Competition

Competition

  • U.S. companies face competition from India and China as they continue to invest

  • It is predicted that these emerging markets will surpass the U.S. in R&D spending

  • Last year R&D spending:

    • Grew 4% in North America

    • 2% in Japan

    • Fell 1% in Europe

    • Grew 7% in India and China


Investing in innovation in a downturn

Investing in Innovation in a Downturn

  • http://online.wsj.com/video/investing-in-innovation-in-a-downturn/D40550A5-0E55-426A-B92A-37951273072E.html


Questions

Questions?


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