I know I have mentioned it before but there is a great read called UNIVERSITY INC. by Jennifer Washburn. She examines the pitfalls of turning university research into corporate research; appropriate for our times.
With the decade long drive to reduce costs the concept of business driven innovation has also been driven from the bottom line. Innovation is the domain of the supply chain manager and the product designer. It seems economics no longer support the idea that a business can build marginal security to divert some of the profit to innovation research. Yet, stock buybacks and management bonuses are on the rise.
R&D levels can be explained in lots of different ways. R&D intensity, a function of R&D expenditures as a percentage of GDP is just one. In 2001 R&D intensity reached its highest reported level of 4.2%. A steady decline was experienced through 2005 to a 3.7%. (NSF)
As the business contribution to R&D goes down, the government’s contribution goes up. Federally Funded R&D Centers (FFRDCs) expenditures grew significantly from 2003 to 2009: $13B to roughly $15B. Examining expenditures of university administered FFRDCs, total expenditures decreased over half. Industry administered FFRDC expenditures grew from $2.5B to over $6.4 Billion. Increasing business activity in the face of a recession is an admirable goal. But getting use to government money to fund research that a business should be doing anyway is not sustainable.
The perception is that the big ideas, the creative, often risky, endeavors that yield big results have been driven from the day to day operations of companies. There just doesn’t seem to be room for the “luxury” of the process. My experience has been in every company there existed the person or groups of persons who drove new ideas outside the mainstream of those businesses. I do not see those people in companies anymore. I see them at business networking events and expos. Their “style” often yields to the question: “yes, but what can you DO?” I see the dilemma. Who can afford to have “thinkers” on staff?
Yet, the drive for new products and new business revenue streams is a never ending requirement. Business moves too fast and competitors are too quick to take advantage. Doing and thinking seems to be the only answer. Scrum based business development might be the next big thing.