Money Kills Innovation
Rasmus’s most recent blog talks about how the most innovative companies are the ones that spend very little money on research and development. He has based this on the report done by Booz & Co which found 1000 companies with the biggest 2010 research and development budgets and then invited 600 executives from those companies to rate which ones they considered to be the most innovative.
Apple was the company they considered to be the most innovative, however it was the 70th highest spender on research and development. Google came second in the innovation study and also did not rank in the top 20 spenders on research and development.
Rasmus points out that 4 out of the top 5 research and development companies were health care companies, none of which were ranked among the top ten most innovative. He states that “sometimes affluence seems to dull the appetite for innovation. If you have a zillion dollars, then you probably will spend that, but if you have less, you may come up with an interesting, more efficient solution.”
He believes that innovation is about brain power and not about how much money you can spend as a company on research and development. Rasmus finishes by saying “Every time you hear an executive saying: »We’re outspending our nearest competitor two-to-one« it is worth asking him or her: »Do your customers also think you’re out-innovating your competitors two-to-one?«”