Survey Finds R&D to Increase in 2012 With Emphasis On Innovation

A survey conducted by the Industrial Research Institute (IRI) has found that R&D spending is expected to increase in 2012. The company's 2012 R&D Trends Forecast also found that new product development will increase in 2012.

The company surveyed 104 participants from a cross-section of industries, in medium to large companies, many multinational, with a total of 240 laboratories outside of the United States in 38 countries.

Of those surveyed, 94% indicated that they expected R&D spending to remain the same or increase, while only six companies expected a decrease. As in the past, the managers expect this increase to be focused on new business projects. While most respondents reported expectations that capital spending, support of existing businesses and directed basic research would remain relatively flat, almost 70% indicated that they thought R&D budgets focused on new business development would increase, as compared with only 8% who thought their spending in this area might decrease.

The expectations for R&D hiring in 2012 remain positive. Most respondents expected hiring to remain at current levels or increase slightly, either through increases in professional personnel levels or through new graduate hiring or both.

Industry segment data was collected as a part of this survey; data is presented for segments that are represented by at least five companies. This year, that includes chemicals, consumer products, food and paper. Although most managers reported expecting increases in R&D budgets in 2012, managers in the consumer products and paper industries expect decreases in overall R&D spending, while those in chemicals and food expected much larger increases than the overall average.

The companies continue to participate in external R&D collaborations. While participation in consortia grows, companies are continuing to participate in alliances and joint R&D ventures.

About 70% of participating companies now have R&D facilities overseas. This year’s list of locations is longer than last year’s, suggesting that businesses are broadening their global reach. Specifically, Thailand, Argentina and Colombia are new entrants on the list, suggesting that companies are looking more to innovation in Asia and South America. In addition, there is an emergence of Eastern European countries, in particular the Czech Republic, Slovakia, and Romania.

One thing was common among survey participants—they all were concerned over innovation. When asked "What keeps you up at night," most of the participants answered with some form of innovation. When asked about the top challenges facing R&D managers, respondents indicated that their biggest problems were “growing the business through innovation,” “accelerating innovation” and “balancing long-term and short-term R&D objectives”

More in Methods/Tools