R&D Spending To Remain The Same In 2014
ARLINGTON, VA – Innovation leaders from a broad cross-section of industries are anticipating a period of stagnation in R&D spending in 2014, according to the 30th Annual R&D Trends Forecast conducted by the Industrial Research Institute (IRI). However, while little to no change is expected in the areas of spending and budget allocation, there is a positive outlook for hiring in the new year.
The survey, which was conducted in August and September of 2013, is based on feedback from R&D leaders from 107 medium to large corporations in various industries including Chemicals, Gases and Advanced Materials, Food, Tobacco and Related Products; Industrial Machinery, Equipment and Products, and Consumer Products, among others. Respondents were asked about their actual activity in the past year, their expected investment levels in the coming year, their plans for international dispersion of R&D facilities and their top concerns going into 2014.
“While this year’s R&D Trends Forecast is indicative of a changing business environment, there are areas of expected growth that have us optimistic,” said Ed Bernstein, IRI president. “We’re encouraged by the anticipated increase in hiring across industry segments. Talent is essential to the R&D industry and our ability to bring fresh innovations to the marketplace. We’re confident that an uptick in hiring will lead to industry growth over time.”
Highlights from the survey include the following:
- 89 percent of respondents expect total R&D investment to increase or remain the same, with sentiment heavily weighted towards no change. Investment in new business, typically the area that sees the most relative growth, is showing an even split with 19 percent of R&D managers expecting an investment increase and 16 percent expecting a decrease, the remainder expecting no change. The largest relative downturn, however, is expected to be in the area of basic research with 25 percent of respondents indicating an expected decrease.
- Based on IRI’s sea change index, which measures underlying sentiment in the data, more consumer product and industrial equipment companies expect R&D spending growth relative to other industries.
- The top factors affecting budget changes in 2013 were said to be, in order of importance: changing business conditions; change in emphasis on growth of new products, processes or services; strategy changes; and, schedule changes.
- 87 percent of respondents expect mild growth in professional hiring and 84 percent expect an increase or no change in new graduate hiring, providing a positive outlook for all industries, which are otherwise seeing stagnation or, in some areas, decline.
- The top concern among R&D managers moving into 2014 is overwhelmingly “balancing long-term and short-term R&D objectives,” which beat out all other concerns by a wide margin.
About the Industrial Research Institute (IRI)
The Industrial Research Institute (IRI) is an organization of 200+ industrial and service companies having a common interest in the effective management of technological innovation. IRI member companies span diverse industries and represent a substantial portion of our nation’s gross domestic product. IRI is the only cross-industry organization creating innovation leadership solutions and best practices in innovation management developed through collaborative knowledge creation. For more information, call 703-647-2580 or visit www.iriweb.org.