R&D spending during downturn and resulting payoff

Try arguing with history. Companies that hiked R&D spend in the 2001-2002 downturn got a leg up in the recovery that followed. Five years after that downturn, the cumulative increase in share price of the big R&D spenders was 136%.

The analysis involved 177 companies with market values exceeding $100 million on Dec 31, 2002 that hiked R&D spending by more than 10% in both 2001 and 2002.

Source: BusinessWeek February 9, 2009

First posted in WordPress on February 11, 2009