R&D Spending Is the Most Misleading Number in Business
From The Innovators Studio with Phil McKinney by Phil McKinney
April 15, 2026 · 17 min · Season 21 · Episode 3
About this episode
The episode discusses the misleading nature of R&D spending numbers in public companies and the implications for innovation decisions.
Every public company's R&D number is a lie hiding in plain sight. Not because anyone falsified it. Because the number was never built to tell the truth. It was built to satisfy an accounting standard written in 1974. And for fifty years, boards, analysts, and CEOs have been making billion-dollar innovation decisions based on a number designed by accountants to solve a different problem entirely. Here's what makes this genuinely strange. The real number exists. The government has been collecting it from every major US company for decades. It would answer the question every innovation leader and investor actually needs answered. And it is locked away by federal law. Confidential. Never published. Never seen by the people who need it most. It's sitting in a federal database right now. And there's a way to estimate it for any public company, without asking anyone's permission. I know it exists because I spent years building it from the inside. Why the R&D Signal Was Blurry When I was running innovation at HP, we discovered this problem firsthand. We had a connection between R&D investment and gross margin that held up across decades of HP history. Better than anything…
People in this episode
Host: Phil McKinney
Topics covered
- R&D spending
- business innovation
- accounting standards
- public companies
- investment decisions
Keywords
- R&D
- business
- innovation
- accounting
- public companies
- investment
Mentioned in this episode
Organizations: HP, US government
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