Industrial Research Institute's R&D Trends Forecast for 1998

Article excerpt

The outlook for industrial R&D in the United States continues to be positive, this 14th annual forecast reveals. Compare it with accompanying forecasts from IRI counterparts in Europe, Australia, Brazil, Japan, and Korea.

IRI's R&D trends forecast for 1998 indicates that the outlook for industrial R&D continues to be positive. Thirty-one percent of the respondents plan to increase their R&D expenditures by more than 5 percent in 1998. The overall projected increase in R&D budgets over 1997 by respondents is expected to be 4.8 percent.

IRI's 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 1998 forecast is based on replies from 129 IRI member companies. These companies expect an average R&D intensity (R&D as a percent of sales) of 3.1 percent, slightly lower than the 3.4 forecast for 1997 (which may reflect an anticipation of significant growth in sales for 1998).

This optimistic outlook is quite similar to last year's prediction for 1997. The graphs on page 18 illustrate the following details:

Eighty percent of the respondents expect their R&D expenditures to increase in 1998, with 31 percent anticipating increases of more than 5 percent. Last year, 29 percent of the respondents expected increases of more than 5 percent.

Consistent with these forecasts, 78 percent expect their capital spending for R&D to increase, with 26 percent anticipating increases of more than 5 percent and 22 percent expecting decreases (last year, 29 percent expected decreases).

Also consistent, 20 percent expect total R&D professional staffing to increase by more than 5 percent, while 26 percent will hire more new graduates (last year's forecasts were 15 and 17 percent, respectively). "Increases" in the following categories represent the percent of companies expecting increases greater than 5 percent.

About 14 percent expect to increase the amount of "directed basic" research (similar to last year's forecast of IS percent).

Increased grants for university R&D are planned by 21 percent (19 percent last year).

Increases in alliances and joint ventures are seen by 39 percent (same as last year). …