Summary.
Although U.S. companies are spending more on R&D overall than they have in recent years, they’re putting that money mainly into new project development and neglecting other areas that are important to long-term innovation efforts. When, for its 2007 R&D forecast, the Industrial Research Institute surveyed 99 firms that do research, more than a third said they were ramping up R&D expenditures on new projects by at least 5% this year. By contrast, only 14% reported such an increase in directed basic research (exploration of fundamental principles that’s guided by the organization’s strategic goals). This limited emphasis on broader inquiry isn’t just a 2007 slump; it’s a trend that extends back over the past seven years. (See the exhibit “Basic Research Is Being Shortchanged.”)