[Ecommerce] Hey big spender! Waste your R&D on me

[Michelle Childs]

<snip>In news that will dismay proud research fellows from IBM to Sun
Microsystems, patents derived from R&D have not added a single cent to
their companies' income. Comparing financial performance with information
from a patents database operated by ipIQ, the report concluded: "R&D
spending does relate statistically to the number of patents granted,
across all the industries we studies.... [however] we found no statistical
relationship between financial performance and either patent counts or
patent quality."

http://www.regdeveloper.co.uk/2007/01/09/microsoft_innovation_spending/

Hey big spender! Waste your R&D on me
Big Bucks does not equal big returns for Microsoft et al
By Gavin Clarke &#8594;
Published Tuesday 9th January 2007 23:00 GMT

Microsoft out-gunned Google on R&D in 2005 in dollar terms but was
out-innovated by its rival and got less value for its money, according to
a new study.

The Booz Allen Hamilton Global Innovation 1000 report places Microsoft in
the top 10 of all R&D spenders, the company failed to make a list of 94
so-called "high leverage innovators" - defined as companies that spent "a
lot less" on R&D, but whose businesses still out-performed rivals.

 Booz Allen highlights SanDisk and Symantec for getting results on less
money - both made the top 94, with R&D of $195m and $665m respectively.
According to Booz Allen, these companies have focused engineering and
management decision making, which are limited to relatively few people
with an ability to act fast.

None of the top R&D spenders - which each spent in excess of $4.7bn
annually - made the top 94 list. The high-rollers include Siemens, IBM,
Samsung, Intel, Nokia and Sony.

This year Microsoft will spend a record $9bn on R&D - $3bn more than it
had initially planned - with much of the money directed into technology
that will enable it to better compete against Google.

Google last year spent much less on R&D than Microsoft - $599m versus
$6.5bn respectively. But Booz Allen highlights Google's 70-20-10 rule to
encourage innovation among its engineers. They spend 70 per cent of time
on the core business, 20 per cent on related businesses and 10 per cent on
areas of their choosing - to produce new services that helped drive the
main search ads businesses.

"High-leverage companies are often famous for their skill in one
particular stage, but a close look shows that they reinforce that skill
with competence at all stages of the value chain," Booz Allen said.

Over all, there was bad news for IT companies putting a premium on
billion-dollar R&D. Assessing the impact of Global 1000 spending over five
years, Booz Allen found: "Money is wasted 're-inventing wheels' that
others have already rolled out. Good ideas get stuck in development
bottlenecks. And promising innovations never get to market because of
flawed understanding of customers' needs, and poor marketing and
investment planning."

In news that will dismay proud research fellows from IBM to Sun
Microsystems, patents derived from R&D have not added a single cent to
their companies' income. Comparing financial performance with information
from a patents database operated by ipIQ, the report concluded: "R&D
spending does relate statistically to the number of patents granted,
across all the industries we studies.... [however] we found no statistical
relationship between financial performance and either patent counts or
patent quality." =AE






--
Michelle Childs -Head of European Affairs
Consumer Project on Technology in London
24, Highbury Crescent, London, N5 1RX,UK.
Tel:+44(0)207 226 6663 ex 252.
Mob:+44(0)790 386 4642. Fax: +44(0)207 354 0607
http://www.cptech.org

Consumer Project on Technology in Washington, DC
1621 Connecticut Ave, NW, Washington, DC 20009 USA .Tel.:
+1.202.332.2670,Fax: +1.202.332.2673

Consumer Project on Technology in Geneva
1 Route des  Morillons, CP 2100, 1211 Geneva 2, Switzerland
Tel: +41 22 791 6727