The world's 1,000 largest corporate R&D spenders increased their R&D investment last year by twice the dollar amount of 2005, a study said.

For the first time in three years, the pace of R&D spending in 2006 caught up to the rate of sales growth among these companies, said the Booz Allen Hamilton's third annual analysis of R&D spending rise.

North American headquartered companies led the way with the largest increase in absolute spending; R&D investment in emerging markets continues to grow rapidly, but remains a relatively small percentage of the global total, the study revealed.
 
Booz Allen also identified three distinct corporate innovation strategies, but concluded that the most significant performance differences lay not in which innovation strategy was used, but in how tightly it was aligned with overall corporate strategy.

 Companies that get the greatest return from their R&D investment also attributed much of their success to their focus on customer insight throughout the innovation process.  In fact, companies that emphasise direct customer engagement reported three times higher operating income growth, 65 per cent higher total shareholder return, and two times greater return on assets than companies less focused on customer feedback.

Booz Allen analyzed the world's top 1,000 public corporate research and development spenders - the Booz Allen Global Innovation 1000 - in what continues to be the most comprehensive effort to assess the influence of R&D on corporate performance.

The study looked at spending on innovation and corporate performance, and uncovered insights into how organisations can get the greatest return on their innovation investment.

New to the study this year is an in-depth examination of a subset of this year's Global Innovation 1000 companies representing $68 billion in 2006 R&D spending, to better understand the connection between innovation and strategy, and between strategy and the role of the customer across the innovation value chain.

'While there is more than one innovation strategy that can win in the marketplace, it is clear that the key to superior performance lies in linking innovation strategy and corporate strategy - and in focusing on the customer in ways that can best promote strategic success,' said vice-president at Booz Allen Barry Jaruzelski.- TradeArabia News Service