Corporate innovation spending down 3.5pc
Manama, November 5, 2010
The total research and development (R&D) spending among the world's top spenders on innovation dropped in 2009 for the first time in 13 years, according to a study.
The sixth annual study of corporate innovation spending, by management consulting firm Booz & Company revealed that the 1,000 companies that spent the most on R&D decreased their total spending by 3.5 per cent to $503 billion in 2009.
This followed a relatively strong 2008 during in which R&D spending continued to grow despite the recession.
Saudi Arabia's Saudi Basic Industries Corporation (Sabic) is the only company in the 'Innovations 1000' list from the Middle East and one of the Middle East's strong counter cycle investment players, the study said.
Sabic's European campaign at "K-Fair", the leading fair for the global plastics industry, is based on the company's technology, innovation, and R&D leadership.
Sabic holds slot number 501 in the 1,000 list and is one of the world's top spenders in innovation, outperforming many of its competitors.
Total R&D spend by Sabic dropped by 7.3 per cent going from $152.3 million in 2008 to $141.2 million in 2009.
Other chemical companies had cut their R&D spend significantly more during the crisis period.
"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," Booz & Company lead economist Hatem Samman said.
"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.
"As the recession draws to a close and corporate earnings rebound, 2010 will be an important test of their commitment to innovation. Indeed, the most forward looking companies will likely move quickly to restore the R&D cuts they made in 2009," he added.-TradeArabia News Service