R&D doesn’t mean innovation
Appears in Print As: R&D doesn’t mean innovation
Research and development is a hot topic, judging by the response to our recent editorial on the subject. So it might be interesting to see where research dollars really come from, according to figures from the National Science Foundation.
The NSF says a little less than 70% of all research funding in the U. S. comes from private industry. Federal government funds another 26%, with colleges and universities paying for a little less than 3%.
Even more interesting is that the U. S. accounts for about 33% of global R&D spending. In fact, the U. S. is the biggest R&D spender on the planet by far. Japan and China are second and third with about 13% and 9% of the world’s total, respectively.
But something doesn’t add up in this picture. With all the money flowing into R&D, you might wonder why there is so much hand-wringing among politicians and business leaders about a lack of innovation. One sign of the trend: For the first time, the Global Risk Management Survey compiled by the risk management firm Aon Corp. found business leaders put a failure to innovate on the list of top-10 global risks.
So if 33% of the world’s R&D funds don’t buy innovation, what do they buy? Insight into the answer comes from Matt Ridley, a zoologist-turned-science-writer for The Economist magazine. Ridley says that company R&D budgets “get captured by increasingly defensive and complacent corporate bureaucrats, who spend them on low-risk, dull projects and fail to notice gigantic new opportunities, which, thereby, turn into threats.”
More to the point, the evidence is that an increasing amount of R&D goes into erecting a thicket of patents to protect existing technologies rather than to perfect new ideas. You can get a sense of this effort from the NSF statistics which show that “R&D” is really small “R” and big “D”: About 60% of all R&D work in the U. S. is “development.” Applied research accounts for just 22% of the total, and basic research another 17%.
It’s been argued that much of the work now put into coming up with mundane-yet-patentable technology will have the unintended consequences of hindering innovation. This is especially likely if it falls into the hands of patent trolls buying up inconsequential patents simply so they can sue those who infringe them. The often-cited example of the potential damage is that of the smartphone industry. An estimated 250,000 patents cover this technology in one country or another. If a court finds just one infringed patent, it will force the offending handsets to be pulled off shelves.
Is there a way to make R&D more fruitful without spending more? Prescriptions for innovation often advocate thinking out of the box, so here is some out-of-the-box thinking about R&D, suggested by the work of George Basalla, Professor Emeritus of the University of Delaware’s Dept. of History: Eliminate patents. In the second half of the 19th century neither Holland nor Switzerland had a patent system, but that didn’t stop those countries from thriving economically. In fact, the lack of patents acted as a stimulus for two Dutch industries back then, margarine and incandescent light-bulb production. And Swiss industry of the time was successful enough to attract foreign capitalists willing to invest despite lack of patent protection.
— Leland Teschler, Editor
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© 2012 Penton Media Inc.
© 2012 Penton Media Inc.
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Comments
R&D doesn’t mean innovation
Patents aren't necessarily the problem, but patent trolls are. The simplest way I can see to to block the trolls is to outlaw the direct sale of pantents. Instead of an outright transfer of ownership, patent owners would be allowed to liscense their patent to other companies. Exclusive liscense could also be restricted to just a couple of years. Legal defense would fall to the original patent owner. In the instance where one companies purchases another in entirity, the remaining life of all acquired patents would be cut in half.
A system such as this would still allow the innovators to reap the rewards of a patent, but would slow the large corporations that try to buy up patents for litigious reasons. You shouldn't be allowed to sue someone else for infringing on an idea that you weren't smart enough to come up with on your own.
R&D dosn't mean innovation
The 60% proportion of R&D that is devoted to development should be an indicator of how much research is being commercialised for introduction into the market as products. The alleged lack of results from high R&D spend in the US could indicate that 60% is not a high enough proportion. If the report shows that there is no correlation between R&D spend and "innovation" as defined by the generation of innovative products, combined R&D spend is not the right parameter to study. Perhaps plots, broken down by country or market sector, of the proportion of R&D spend devoted to development against the number of innovative products introduced would provide a a more accurate picture.
Sad, but true. I work for a
Sad, but true. I work for a very large global company that outwardly prides itself on innovation, but inwardly mostly pursues low-hanging fruit. It's so bad, that senior executives have to send out internal letters claiming that we're not just trying to catch up to our competitors, when that is very clearly what we are doing.
It used to be that the really successful development companies would have a constant rotation of many projects. Most would fail before they reached the market, but maybe an idea from one failed project would enable or inspire another successful project. Now, projects get killed before they even start, because they are based on something unproven. If we wait for something to be proven before we prove it ourselves, then we are by definition waiting for someone else to prove it, by which they will own it.
It used to be that most of the big innovations came from big companies (Xerox, Kodak, Bell). Now the big companies wait for thousands of tiny companies to do the innovation, then buy the dozens of winners. It's sad.
I agree that the patent system is broadly abused, but that is nothing new. Eliminating patents would only help the largest companies reduce their costs of buying out the few successful innovators.
I also agree with the commentor who bemoaned the reduction in value of engineers. Engineers used to be prized, and the manufacturing companies were run by people who understood the value of good engineering. Now companies are run by MBA's who don't know, don't understand and don't care. They see engineering only as a cost to be reduced, and a timeline to be compressed. I'd have a hard time recommending engineering as a career to my son if things continue as they are.
R&D Doesn't mean Innovation
Patent protection sucks; it costs too much, expires too soon, and doesn't protect the inventor from infringements in that he must still spend his own funds to win his case. Copyrights are better, their law, continuity and history/case law is better, but doesn't cover important items like schematics and engineering drawings. Why must something necessarily be artsy to qualify for copyrights? Industrial arts are STILL art, with more discipline, in spades.
R&D?
Well, the US is no longer bringing in smart people; it seems we have lots of refugees and politically oppressed and 'the common clay, you know...morons.' So, the funding of science and education is decreasing just for welfare of various kinds. Investments are going everywhere else in the world now and it seems more Americans are just not interested in Space Program. The Space Program is dominated by special interest and politics and no one is willing to take a risk, so Nothing is happening. It seems wasteful and Americans smell the rat. Lots of stupid spending keeps going on and people see through it for the most part. Sure there’s a lot of planning and viewgraph engineering but there are no longer any adult conversations taking place here. Innovation is in the Financial world these days, technology as a product no longer makes enough money for the investors. Litigation and posturing and all the outside activity is what limits innovation these days. The game players and marketeers are killing the technology here. We can innovate mechanisms and chemicals and materials just fine, but as long as there isn't a quick buck in it, the investors drop it like yesterday’s papers. You also have to realize that Engineering is no longer a professional occupation; my complaint/observation is that programmers and computer scientist started assuming ‘engineering’ into their job titles to get the bigger salaries and management has slowly degraded their value to the point of starvation: by adjustment for inflation, we’re at about 20% on average vs. a century ago. Engineering attracts a particular personality and will continue to but for a few years now it’s no better than just another job.
http://machinedesign.com/article/rd-doesn-t-mean-innovation-1006
Killing patents is a great way to kill small companies. As an inventor with 20 patents and founder of a number of startups I can assure you that eliminating patents would decimate risk funding for small high tech companies, the ones that actually do most of the innovative R&D in this country.
R&D Doesn't mean Innovation
I agree with most of the article, however, I do not agree with the comment about eliminating patents.
Regardless of what mischief is perpetrated by large corporations with patents, patent protection remains one of the only ways for inventors and small businesses to protect otherwise steal-able ideas, and subsequently make well-deserved money from them.
In other words, the existence of abuses in one area does not invalidate the whole system, but rather the challenge is to directly address the abuses, and leave the parts that work alone.
R&D doesn’t mean innovation
I don't think it's necessary to eliminate patents, which do help individuals protect their innovations. The problem is the change in the patent laws. The era where you can patent the idea of "one click" is what leads to the proliferation of patents that are just to provide a way to flog your rivals with lawsuits and allow the company with the deepest pockets to win. See Patently Absurd By James Gleick in the March 12, 2000 New York Times.
The same issue has occurred for copyright – if you have been paying attention Facebook is suing companies that have “book” in their name claiming infringement. No longer are patents and copyrights issued for unique ideas or inventions.
R&D Doesn't mean Innovation
Great presentation of a timely subject. Tend to agree on the role of Patents in the 21st century. Also, our Federally controlled education system has greatly retarded innovation, as has Federal Control of our energy sources (DOE and FDA). Gotta reduce this ever growing, innovation (freedom) restricting, Federal government,,,Buddy
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