Spending on research and development among the world's top investors in innovation dropped in 2009 for the first time in 13 years, according to a new study by the consulting firm Booz & Company. Among the 1,000 global companies that consistently spend the most on innovation research and development, total investment dropped 3.5 percent to $503 billion in 2009.
Likewise, revenue from innovations among the same companies fell 11 percent from $15.1 trillion to $13.4 trillion.
"It's no surprise that the worldwide recession finally caught up with the world's top innovation spenders in 2009, causing them to trim their innovation budgets," said Barry Jaruzelski, a partner at Booz & Company. "However, the relatively modest cuts in R&D spending compared to much larger declines in revenues demonstrates the continued importance of innovation as a critical component of corporate strategy to companies in every industry."
The study also found that more than half of companies surveyed cut their spending on R&D in 2009 - almost all of which came from the automotive, electronics and manufacturing industries, with auto claiming the greatest dip in spending.
The study comes days after CEOs from Google, Alcoa, Coca Cola and IBM urgently pressed the U.S. to invest in innovation development and education. Citing the growing influence of manufacturing-based nations, the executives' remarks, along with the report from Booz & Co., highlight how vital it is for companies and innovators to manage their inventions and intellectual property.