Rejecting the Idea That More Is Better With R&D
One of the most cherished assumptions of the nation's science establishment - and several members of the Clinton administration's economic team - has been that the more money companies spend on research and development, the more competitive the U.S. economy will be.</br></br>But out in the trenches of business, executives increasingly are rejecting the more-is-better philosophy and instead focusing on getting more bang for their R&D dollars as part of the broad restructuring going on throughout U.S. industry.</br></br>As the graph to the right illustrates, each camp in this debate has a different way of tracking corporate investment in R&D - with dramatically different results.</br></br>The National Science Board last year issued an ominous report featuring a cover graphic depicting the precipitous decline in the rate of growth in corporate R&D spending, shown by the white line. "The preeminence of U.S. industrial science and technology can no longer be taken for granted," the report warned in its opening sentence.</br></br>Corporate executives, however, tend to look at R&D spending in the context of overall business activity. By this calculation, as shown by the dark line, corporate R&D has dipped a bit more than in past recessions, but is hardly in wholesale retreat.