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Thursday, April 26, 2007
Booz Allen Hamilton came with a position recently that absolute levels of R&D spending offer little or now indication of how innovative a company really is, it is instructive every now and then to check out how much companies in the technology sector are spending on R&D. Recently, CIO Insight reported on the R&D spending patterns of the top 81 companies in the tech sector, pointing out that the top tech players like Microsoft, IBM and Intel are far and away the R&D spending champs. The top 10 companies on the list invested $32.5 billion in product development in their 2006 fiscal years. That was almost seven in every 10 R&D dollars spent among the companies. The biggest spender was Microsoft, with $6.58 billion. Hotshot company Google was able to devote just 11.6% of its revenue to R&D. It spent $1.23 billion on R&D. The median R&D expenditure among all the 81 companies studied , was at around 15%. of revenues. Some may see Apple & Google as the most innovative companies - they are not there in the top five spenders list. While these companies are spending a lot on R&D, it doesn't mean one may see these companies launching new products shortly. In fact investments and results may not have a direct correlation though one knows that well made investments in research could prepare a company for a better future.
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