Last week, New York Times technology reporter, Steve Lohr, wrote about a Booz&Company annual survey of the 1,000 largest corporate spenders on research and development. In an economic environment laced with cost cutting measures across capital investments, marketing and payroll, the obvious premise for a survey on this topic would be that R&D spending would also take a hit.

Not so, according to the results. Respondents indicated that R&D budgets actually increased 5.7 percent in 2008 and 70% planned to maintain or increase their spend in 2009. Surprising? Not really given the survey also revealed more than 90% of the participating executives said innovation was critical to their companies’ success. More than 90%! With 14 pages of summary, testimonials, pie charts and graphs, this report gives a clear picture of just how integral innovation is to the corporate strategies behind the world’s most important industries.

The report uses an arms-race analogy to describe how the 1,000 largest corporate R&D spenders consider innovation so important, they don’t want to disarm despite the short-term economics. Innovation is the foundation they are betting on to hold their market positions and gain a competitive edge. In their minds, everything can be cut…but not R&D.

For me personally, the release of the Booz&Company results couldn’t have been better timed – today happens to be the fourth annual Innovation Day. But with the added reinforcement of the survey conclusions, a big question came to mind. How does an “arms merchant” like Cadence take advantage of the innovation arms race? The answer is simple. We INNOVATE! Read more »