Although U.S. companies are spending more on research and development overall than they have in recent years, they’re putting that money mainly into new project development and neglecting other areas that are important to long-term innovation efforts. When, for its 2007 R&D forecast, the Industrial Research Institute (IRI) surveyed 99 firms that do research, more than a third said they were ramping up R&D expenditures on new projects by at least 5 percent this year.

By contrast, only 14 percent reported such an increase in directed basic research (exploration of fundamental principles that’s guided by the organization’s strategic goals). This limited emphasis on broader inquiry isn’t just a 2007 slump; it’s a trend that extends back over the past seven years.

Directed basic research is critical to innovation over the long run. It opens up avenues for fruitful investigation at a later time, even if the information gathered isn’t directly applicable to current projects.

For instance, ConocoPhillips accumulated—through many years of exploratory research—knowledge about sulfur chemistry and the role of certain catalysts in refining reactions without having a goal of developing a better sulfur-removal technology. But in 2000, after the US government mandated lower sulfur content in gasoline by 2004 for cleaner emissions, the company was able to use its knowledge to develop and commercialize a sulfur-removal technology that both met the federal requirements and preserved more octane than the conventional technology.

Unexpected breakthroughs are another key benefit of directed basic research. Indeed, it promotes serendipitous long-term innovation because you don’t know exactly what you’re looking for when you conduct it or how it may be used in the future.

Consider Pfizer’s new cancer drug Sutent, approved last year by the US Food and Drug Administration. It owes its existence to the discovery that blocking blood-vessel development in tumors will slow and even reverse their growth—a finding from theoretical research conducted more than a decade ago at the Max Planck Institute of Biochemistry, before Sutent was a gleam in anyone’s eye.

For five years in a row, companies in the IRI study have cited “growing the business through innovation” as their biggest problem. Other top concerns have included “accelerating innovation” and “balancing long-term/short-term R&D objectives/focus.” However, their spending behavior doesn’t match their desire to obtain short- and long-term balance.

While firms that concentrate disproportionately on new projects may satisfy some of their immediate business goals, they will probably fail to cultivate the broad-based knowledge they’ll need to realize their leading goal of growth through innovation.

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Jim Scinta, the chairman of the Industrial Research Institute’s Research-on-Research Committee, is the author of Industrial Research Institute’s R&D Trends Forecast for 2007. The full IRI report was published in the January-February 2007 issue of Research-Technology Management.

Where more research and development dollars should go

Although U.S. companies are spending more on research and development overall than they have in recent years, they’re putting that money mainly into new project development and neglecting other areas that are important to long-term innovation efforts.

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Murdoch Wins

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This is what Manila Water Co. Inc. president Antonino T. Aquino has been doing in the past 10 years, since taking the helm of leadership of the Ayala-owned water firm servicing the east zone of urban Metro Manila.

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COVERAGE of its water sampling and testing operations has been expanded to include several towns in Rizal province within its service grid.

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Tattoo you

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From WOM to www

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The monarchical tradition

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Seeing the World

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