Industrial Research Institute's R&D Trends Forecast for 1997

Article excerpt

The outlook for industrial R&D in the US. is generally optimistic, this 13th annual forecast reveals. Compare it with first-time forecasts from IRI counterparts in Europe, Japan and other countries.

IRI's R&D trends forecast for 1997 presents a generally optimistic outlook for industrial R&D. Nearly 30 percent of the respondents plan to increase their R&D expenditures by 6 percent or more in 1997, while the overall projected increase in R&D budgets over 1996 is expected to be 5.6 percent.

The forecast also indicates a continued high level of attention to R&D by top management of U.S. companies and a continuing strong commitment to cooperative research.

The 1997 forecast is based on replies from 121 IRI member companies. These companies expect an average R&D intensity (R&D as a percent of sales) of 3.4 percent, about the same as had been forecast for 1996.

For some elements, the outlook may appear a bit less optimistic than at this time last year, but this may not be statistically significant. Additionally, it may be due to the different mix of companies reporting this year vs. last year. The graphs on page 13 illustrate the following details:

*About 47 percent of the respondents expect R&D expenditures to increase in the range of 1 to 5 percent, and 29 percent anticipate increases greater than 6 percent. Last year, 38 percent of the respondents were expecting increases greater than 6 percent. (Since 1989, about one-half of the respondents have forecast changes in R&D expenditures in the 1-5 percent category).

*Consistent with these forecasts, 24 percent expect capital spending for R&D to increase by 6 percent or more, 47 percent expect it to increase from 1 to 5 percent and 29 percent expect decreases (last year, 26 percent forecast increases of 6 percent or more).

*Also consistent, 15 percent expect total R&D professional staffing to increase by 6 percent or more, and 17 percent will hire more new graduates (last year's forecasts were 21 and 23 percent, respectively).

"Increases" in the following categories represent the percent of companies expecting increases of 6 percent or more.

*About 15 percent expect to increase the amount of "directed basic" research (similar to last year's forecast of 17 percent).

*Increased grants for university R&D are planned by 19 percent, down somewhat from 24 percent last year. …