Debbie Downer on R&D: Counterargument

The Wall Street Journal published an article (summarized on the previous page) that claims R&D spending has maintained a priority for companies like GE and Microsoft, due to the mindset that spending now may help to push them out of the downturn later.

But some academic "heretics" beg to differ.

"There is zero correlation between how much you spend on R&D and your company's success," said William Duggan, a senior lecturer at Columbia Business School. On the contrary, Duggan claims that marketing and operations budgets are those that parallel business success.  

Still, in terms of R&D, Duggan believes that the "D" is more important than the "R." Research, he says, is "not where value starts. It's not the core of your company. It's not the goose that lays the golden egg. That's the misconception that people have." Duggan insists that research is only worthwhile when a person finds something of value, which is not guaranteed.  

Duggan suggests that companies shouldn't rush into spending their own valuable dollars chasing "government-backed stimulus dollars." Instead they should view the government as an emerging potential customer and remain focused on their own core business. He believes that now is not the time to gamble with new technologies in hopes to drive profits. "The idea that success comes from people sitting in a lab coming up with terrific ideas isn't the reality," said Mr. Duggan.

What a deb.


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Brian Swann
VCU Brandcenter / Creative Brand Management / 804-690-7048
www.brandcenter.vcu.edu / swannbr@gmail.com