Good News For 2006 R&D Investment

Industrial spending on research and development by firms conducting R&D in the U.S. will increase in 2006, though R&D outlays aren't expected to grow as fast as revenues.

That's the conclusion of the 22nd annual R&D Trends Forecast, which was released recently by the Industrial Research Institute (IRI). Firms that belong to IRI account for about 60% of the industry-funded R&D in the U.S. More than half of the 196 member companies contacted participated in a survey that serves as the basis for the forecast.

The companies that responded said they are more willing to boost R&D spending and to get involved in more basic research and new business projects than they did last year, according to Alan D. Ayers, manager of external technology at Energizer Battery Manufacturing. Ayers chairs IRI's Research-on-Research Committee, which conducts the survey.

In fact, despite high fuel costs and the dollar reaching a 25-month high against the yen and the euro, the forecast "looks more favorable than it has for the past three years," Ayers notes in an article about the survey in the January/February issue of IRI's Research Technology Management journal.

The survey indicates that some 79% of companies plan to increase hiring of R&D professionals in 2006 and 90% will boost their hiring of new graduates. Nearly all firms will increase outsourcing of R&D to other companies. Most firms also will increase their licensing of technology to and from other companies.

Some 79% of companies will invest more in capital spending for R&D operations in 2006 than they did in 2005. And 78% of companies will raise total company expenditures on R&D as compared with 2005.