R&D Spending: By the Numbers

Dec. 10, 2008

While the software industry spends 13.6% on R&D as a percentage of sales, the chemicals and energy sector spends only 1%.

Jill Jusko

When it comes to how many dollars are being spent on R&D as a percentage of sales, the numbers vary wildly, according to consulting firm Booz & Co.'s annual review of corporate R&D spending. While the computing and electronics, healthcare and auto industry sectors dominated overall R&D spending in 2007 with a combined total of $330 billion, the landscape shifts when the intensity of R&D spend is examined. For example, as a percentage of sales the auto industry spent 3.9% on R&D. That leaves it well short of a top industry sector when it comes to the intensity of R&D spend. Additional findings from Booz & Co. show:

13.6% R&D spend as a percentage of sales for the software and Internet industry

13.4% R&D spend as a percentage of sales for the healthcare industry

7% R&D spend as a percentage of sales for the computer and electronics industry

4.9% R&D spend as a percentage of sales for the aerospace and defense industry

1% R&D spend as a percentage of sales for the chemicals and energy industry

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About the Author

Jill Jusko

Bio: Jill Jusko is executive editor for IndustryWeek. She has been writing about manufacturing operations leadership for more than 20 years. Her coverage spotlights companies that are in pursuit of world-class results in quality, productivity, cost and other benchmarks by implementing the latest continuous improvement and lean/Six-Sigma strategies. Jill also coordinates IndustryWeek’s Best Plants Awards Program, which annually salutes the leading manufacturing facilities in North America.

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