Innovation: invest more, is it better?

A study by Booz Allen Hamilton said that investment in R & D does not mean innovation. It casts doubt very established that investment in R & D is a good indicator of innovation success and, therefore, it automatically has to innovate more to think about spending more. Further details of the study are:

Be quinnovacionand invests less bad, but being the most, gives no security to be good. Of the 1,000 companies surveyed, 10% with the lowest investment rate out clearly hurt sales in gross margins, profits and returns for shareholders. On the other hand, 10% more investment in R & D is slightly better than the rest, but was not statistically significant.

At one point, the number of innovations that a company may develop commercially is limited. Why not hold a patent with the results. Probably there is a limit beyond which the benefit of the projects be used by others.

Yes there is an association between the ratio of R & D on sales and gross profit, although profit is reached. Firms with greater R & D sell higher margin products, but after deducting general and administrative costs, marketing, etc ... are not significantly more profitable.

Against the common belief that smaller firms are better able to innovate for its flexibility, the results indicate that economies of scale are useful. Larger companies invest a smaller proportion of their sales on R & D, without necessarily having significantly worse outcomes.