Tuesday, May 31, 2016

Good news for anyone hoping that civilization will continue to move forward, or just waiting around for flying cars, teleportation, and all those other cool ideas—Corporate America continues to increase its R&D spending.

Calcbench reviewed R&D spending disclosed over the last five calendar years (2010 to 2015), and overall the numbers look good:

  • Total R&D spending for all public filers rose 18.6 percent, and the average per company rose 37.3 percent;
  • Total R&D spending for the S&P 500 rose 15.2 percent, and the average per company rose 27.4 percent;
  • Within the pharmaceutical sector, total spending rose 9.3 percent, and average per company jumped 30 percent;
  • Within the computer manufacturing sector, total spending was flat, but that seems to be because we’re still waiting for roughly 100 filers to submit their 2015 reports. Average spending per company in that sector so far is up 44.2 percent, and total spending through 2014 rose 31.6 percent.

Who is cutting the R&D budget these days? The oil & gas industry—surprising nobody, since that sector continues to reel from low oil prices even today. R&D spending actually soared in the first half of our five-year review period, going from $2.69 billion in 2010 to a whopping $5.15 billion by 2012. Then came the price crash, and R&D spending along with it: a measly $2 billion in 2015. (That does not bode well for firms whenever demand finally does push prices higher, leaving at least some companies scrambling with outdated tech.)

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