Research and development has risen sharply on the corporate agenda in the wake of the global economic crisis, a McKinsey survey finds.1 Four in ten respondents report that both R&D budgets and activity levels are up this year relative to 2009. What’s more, executives are remarkably optimistic that the R&D moves their companies made during the downturn will serve them well in the coming three to five years.
These are among the findings of a survey that examined how senior executives view the current state of R&D, as well as how their companies’ R&D groups responded to, learned from, and were affected by the recent economic turmoil.
The survey suggests that some optimism is warranted: a sizable number of respondents say their companies will retain the usually beneficial changes made during 2009 to R&D organizations, infrastructure, or processes and will abandon fixes that likely helped in the crisis but aren’t needed in the longer term. Nonetheless, some executives worry that the cost-cutting moves their companies made in R&D during 2009 will have painful consequences, including a weaker talent pool and a loss of market share resulting from shriveled new-product pipelines.
By contrast, the most optimistic picture emerges among companies that get the greatest benefit from innovation. These high performers were much less likely to scale back activity during the height of the downturn; indeed, they appear to have used it as an opportunity to maintain—or even increase—their long-term superiority just as global economic prospects are brightening.
Notes