Fortune magazine published a highly-read piece entitled, The Death of American Research and Development. The article discusses research that suggests lower corporate spending on research and development (R&D) has led to a lower innovation rate, thereby proposing there is an innovation problem in America.
It would seem that additional research is necessary to determine if innovation is indeed slowing. There are other factors at play. It may be that corporations are more efficient at developing new technologies, thereby lowering the necessary costs. Corporations also innovate in a variety of ways, including generating home grown technologies, licensing in technologies to develop new products, and purchasing companies with developed technologies. All these activities may lead to an increase in innovation and a drop in research and development expenses.
Two companies covered in this article are Dow Chemical (DOW) and DuPont (DD). A quick look at their innovation activities uncovers the following facts over the past few years.
- Over the past few years, Dow has developed technologies for pesticides, herbicides, plant protection, and synthetic resigns.
- Dow has developed numerous brands in the agroscience and crop protection markets, indicating successful innovation brought to market.
- Dow has purchased technologies in water solutions, which may be further developed to bring to market. This is an example of purchased innovation.
- Dow has entered into collaboration partnerships to jointly develop a process to prepare and screen novel materials and bring zinc finger DNA-binding proteins (ZFPs) to market.
- Over the past few years, Dupont has developed technologies for polymers, specialty fabrics, coatings, safety glass, and solar cells.
- Dupont has entered into licensing arrangements around bioactives, biomaterials, and biorefineries technologies.
- Dupont is joint developing coating systems with another party.
- Dupont has purchased technologies in agriculture biotechnology.
The data from ktMINE’s innovation and intangible asset database shows that both companies continue to generate innovation activities despite stagnant or diminishing R&D expenses.
It would take researching each individual corporation to determine if this holds true across the board. While it is difficult to determine which innovation will lead to a home run vs. failure, certainly innovation is continuing.