R&D is the key to future success and growth.

Manufacturing News, Source : British Industry
Published : 16 Oct 2002 8:46

“Grow your own wealth,” is the message from the 12th annual R&D Scoreboard released this month by the DTI Innovation Group’s Business Finance and Investment Unit.

The Scoreboard reveals that sustained organic company growth based on R&D and capital investment (Capex) is associated with increased relative shareholder returns in UK companies over three to four year periods. This is in stark contrast to companies that focused their investment on major acquisitions, which, in two-thirds of cases, were associated with a reduction in relative shareholder returns.

The Scoreboard suggests that UK companies are increasing their investment in R&D for new products and services, albeit slowly.

The average R&D intensity (R&D as a percentage of sales) has been steadily rising from 1.8 per cent in 1998 to 2.2 per cent in 2002. R&D investment in the UK is nowhere near levels in the US, however, with 11 per cent of UK companies showing R&D exceeding 10 per cent compared to 33 per cent of US companies. The top 1000 US R&D investors had an average R&D intensity of 4.3 per cent for the last two years.

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