Place fewer, bigger bets. Or is it just fewer bets? Our IT industry R&D is not even growing by 1% a year.
HP calls it “laser focus;” IBM says “a realignment of research priorities;” and Sun just calls it “trimming.”
HPLabs shifts funding from 150 projects to 20-30 bigger projects. Prith Banerjee, director, says: “If you have limited resources, having a ‘let 1,000 flowers bloom’ approach doesn’t give enough resources to any one idea”.
But it worked well in the past. According to research, companies who boost R&D (as a percentage of their sales) over a 5-year period tend to be rewarded with higher profits and share prices in later years.