Twice the R&D Budget Doesn't Get You Twice the Innovations

But having a healthy R&D can make a huge difference to the bottom line.

An example I just recently came across while researching some retrogaming articles:

http://en.wikipedia.org/wiki/Nintendo_development_teams

Sega also had a number of very important and successful R&D teams (AM1, AM2, AM3, etc.)

They're large investments no doubt, but both of these companies did, or are doing, very well because of the R&D efforts.

On the opposite end of the spectrum, I once was contracted to work with a large defense system integrator who kept the R&D team I was assigned to on less than a shoe string budget. The result? Missed deadlines for months and months while the team awaited funding resulting in an incomplete system and no business at the end of it because there was nothing to show the eventual customer.

I think this goes without saying, but product announcements are not the only indication of successful R&D. A company can also do serious R&D and gain value from any patents acquired or products they didn't ship as a result. If anything, I think it indicates where R&D beyond a certain point goes. Companies needs R&D to advance their core products, but if you're doubling R&D spending past that you're probably researching "pie in the sky" ideas that are either far away from feasibility or not directly tied to any core products you currently ship.

Seems like a silly distraction claim since they only look at raw number of things and not their quality or return.

Would you rather invest $10,000 10 years ago and get a PHP calendar app, or invest $20,000 and get Google search? Both are single products.

The major assertion is that the trend predicted by a few variables will continue on. What if it's parabolic? What happens if you put in 10x the amount of investment? What if it's harmonic and there are sweet spots?

It would if you could use that budget to hire twice as many genuine innovators. But those folks can be difficult to find....