Syndicate content

Add new comment

That's a very good point. In fact, R&D can translate into very different outcomes depending on the industry and the company making the investment. For example, although General Motors (GM) was the second biggest global R&D spender in 2007 (, with more than $8 billion in spending, it's not a company that is typically associated with breakthrough innovation. This year, GM did not make it into either the Business Week/Boston Consulting Group ( or Fast Company ( list of top 50 innovative companies. And it’s not only because GM has been hard hit by the global financial crisis. The company has only made it once in the Business Week/Boston Consulting Group list, at number 18 (behind Toyota and Honda), in 2008. GM’s patenting activity, a measure of inventive activity, provides a similar story. In spite of huge R&D spending GM did not make it among the top 35 US patent recipients in 2008 ( Compare the slow progress in automobile fuel efficiency and autonomous control to the dizzying growth in computing power. Electronics firms consistently dominate in patent rankings. These differences are explained by the fact that innovation depends on much more than R&D. It depends on things like an organization's ability to identify which R&D projects are worth investing in from the very beginning. It depends on its ability to identify and partner with other organizations that have capabilities it does not have. It depends on its ability to meet user needs and commercialize the product of its R&D. It also depends on the pace of technological change in related sectors. For example, the fast pace of innovation in the portable media players is largely due to improvements in memory storage and processing power in the electronics component industry. So how do we know that we need to invest more in energy R&D? The answer may lie in an interesting paper* published in 2007 by Gregory Nemet and Daniel Kammen from the University of California, Berkeley. The paper shows that since the 1980s public R&D investments and patenting have been highly correlated in low-carbon energy sectors. The paper also finds that both public R&D and patenting in those sectors have declined since the early 1980s. Other statistical sources from the OECD confirm that patents in those sectors account for a tiny share of total global patents. These findings strongly indicate that we could expect a significant increase in inventive activity by significantly increasing R&D in low-carbon energy sectors. Jean-Louis * Nemet, G.F. and Kammen D.M (2007) "US energy research and development: Declining investment, increasing need, and the feasibility of expansion", Energy Policy 35, pp 746-755.