Invest in R&D, urges DTI

Invest in R&D, urges DTI
Melanie Reynolds The government is urging companies to invest more in R&D as the latest DTI report shows UK firms lagging behind their international competitors in R&D spending. According to the DTI’s R&D scoreboard, the total R&D expenditure by the UK electronics and electrical industry exceeded ?1.223bn in 1997, an increase of less than two per cent compared to 1996. Expenditure as a percentage of sales remained unchanged at 3.1 per cent. “No company can expect profits and growth tomorrow without serious investment today,” said science, energy and industry minister John Battle, commenting on the results. “I would urge businesses and their investors to consider carefully whether the current levels of R&D investment are appropriate for maintaining long-term competitive edge.” At an international level the electronics industry spent over ?41.5bn on R&D, an increase of 18 per cent. This represents an investment of 6.5 per cent of sales. Battle warned that throwing money at R&D is not the whole answer though. “As a measure of future business success the amount of R&D investment can only be a partial indicator,” he said. “What really matters is the effectiveness of that investment.” In the UK, the three companies with the highest levels of R&D spending: GEC, Siemens and IBM, held onto their positions from 1996.


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