Research is what I’m doing when I don’t know what I’m doing. – Wernher von BraunAre your company’s yearly revenues greater than $2B? Then according to a number of studies (see here, here, here, and here) this is what is likely in store for you.
- Within 17 years there is a 50% chance that you will no longer be in the Fortune 1000
- You are investing less and less in basic research (leaving it to Universities and Government)
- The effectiveness of your R&D (your Research Quotient or RQ) is going down
- Your core business is growing incrementally and you struggle to go beyond the core
- New competitors are cropping up and creating offerings you never considered
When asked to think about how new inventions might shape the future, our imaginations tend to leap to technologies that are sophisticated beyond comprehension.In the iconic movie Bladerunner, the sophisticated technology being imagined are intelligent androids that are indistinguishable from ‘real’ humans – even to themselves. Yet when asked to picture how everyday life might look in a society sophisticated enough to build such biological androids, our imaginations falter. Decker (the detective) calls the (sophisticated beyond comprehension) android Rachael from a pay phone.
Does basic scientific research lead to marketplace innovations? This question has been asked (and attempted to be answered) ever since the emergence of the activity we call R&D. Answers have been mixed with some concluding that basic research is the genesis of almost all marketplace advancement and others questioning if we are getting any returns at all on our research dollars.
Acknowledging that correlation is not causation, it’s still striking that, over the past 30 years, both the overall effectiveness of all companies total R&D spending and growth in U.S. GDP have declined by similar amounts. Could it be that there is a causal relationship? The author, a Professor of Strategy at the Olin School of Business, has, over the past number of years, researched and developed the concept of the Research Quotient (RQ) which measures R&D productivity.