The Industrial Research Institute's (IRI) 2010 survey of member companies suggests that 2011 may see a dramatic turnaround in R&D investment. This year, 119 companies across a broad range of industries provided input to the survey; their responses indicate that R&D increases are expected across almost all industry sectors.
The primary focus of this investment is on new-business development projects. Aggressively pursuing innovation and balancing innovation in the overall R&D portfolio continue to be management challenges for the leaders who responded to the survey. They are also concerned about acquisition of, and access to, talent. However, they consistently cite alliance development as a strategy that they are pursuing to address these concerns.
This is the IRI's 27th R&D Trends Forecast. The survey, which was conducted in July and August of 20 ] 0, is focused on expectations for industrial R&D investment in 2011 and based on responses from 95 IRI member companies and 23 non-IRI companies. Because this is a voluntary survey and IRI membership changes due to business events such as mergers, the mix of companies changes from year to year. Nevertheless, we believe that there are a sufficient number of responses from the industrial R&D community for the data to be meaningful.
The results of this survey are discussed as follows:
* A profile of participants
* A summary of R&D expectations
* The trends of expectations over time
* The trends by industry sector
* A look back at last year's predictions and a comparison with this year's results
* Insights into R&D collaboration
* Trends in international collaboration
* Answers to the question "What keeps you up at night?"
Profile of Survey Participants
Figure 1 shows the distribution of the 119 survey participants by projected 2011 corporate revenues. The participants are medium to large companies, many multinational, with a total of 308 laboratories outside of the United States in 43 countries.
As Figure 2 illustrates, 80 percent of the companies surveyed were IRI members, but nonmembers were also invited to participate, and 23 nonmember companies accepted the invitation.
A Summary of R&D Expectations
The principal survey questions and the distribution of the responses are presented in Table 1.
The R&D managers we surveyed projected a significant upturn in R&D spending in 2011; 53 percent of respondents indicated that they expected an increase in their R&D budgets, while only 12 percent expect a decrease. The managers expect this increase to be focused on newbusiness projects. While most respondents reported expectations that capital spending, support of existing businesses, and directed basic research would remain relatively flat, 60 percent indicated that they thought R&D budgets focused on new-business development would increase, as compared with only 9 percent who thought their spending in this area might decrease. It should be mentioned that although expectations of funding for directed basic research on average remained relatively flat, there are companies who are both significantly increasing and significantly decreasing these budgets, displaying very different strategies for the future.
The expectations for R&D hiring in 2011 also appear to be positive. Although very few respondents expect large increases, most companies will remain at current levels or increase either professional personnel levels or new-graduate hiring or both. Finally, most managers indicated that their companies are staying with their current licensing strategies, with approximately 70 percent of managers indicating that they will not change the dollar value of licenses that they acquire or produce in the coming year.
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Trends Over Time
It is very useful to look at the trends in this survey data over time. …