Fast Company

Tech & Innovation Spending Show Corporations Are Recovering

Despite cutting back on spending, big corporations actually expanded their R&D budgets by 5.7% in 2008, reports The New York Times. It's only half as much as the increase in 2007, but it hints that research spending is one of the last things on the corporate chopping block and that the economic slowdown might not stymie innovation as much as conventional wisdom suggests. (Below, Dell has been charging forward on super-thin laptop designs like the Adamo.)

Dell Adamo

The Booz & Company study, which surveyed 1,000 of the country's biggest corporations, also found that 70% of those companies intended to keep growing their R&D budgets in 2009. Calling innovation spending "an arms race," Booz researchers noted that while some sectors (namely automotive) spent conservatively, tech sector companies went for broke. "Eight of the top 10 R&D spenders in the software and Internet sector, the study said, increased their spending," NYTimes.com reports. (Below, patents are also on the rise. The Times says this is common at the tail end of slow/no growth periods, noting that innovation seems to occur independent of the business cycle.)

U.S. patents

Capital investment in technology is also rising. USA Today reports that after six down quarters, corporate spending on computers and software went up in the third quarter. Consumers seem to be spendier too; Microsoft is reporting higher-than-predicted pre-orders for Windows 7 and Bloomberg says the company is "more bullish" on the PC market than just last quarter. Analysts are waiting for Cisco to return its most recent results next week, looking for signs that corporate demand for tech products is indeed growing.

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