Why Most Organizations Aren't Funding Innovation

About this episode

This episode discusses the lack of a settled definition for R&D and its implications for innovation funding in organizations.

Twelve official definitions for R&D. Zero agreement. The US government publishes at least a dozen distinct official definitions across agencies, accounting standards, tax authorities, and international bodies. Not one agrees with the others on where research ends and development begins. Trillions of dollars flow through R&D budgets every year. Boards approve them. Investors evaluate them. Governments subsidize them. Analysts benchmark them. And the term at the center of all of it has no settled definition. A company can gut its research investment without triggering a single alarm on its income statement. Researchers who gained rare access to confidential federal R&D data found exactly this: when companies face financial pressure, they cut research while leaving development essentially untouched, and the combined number barely moves. Every benchmark, every board conversation, every investment thesis built around the R&D line may be built on sand. Innovation, ideas made real, requires both. Research is how you find the idea. Development is how you make it real. Strip out the research and you're not innovating, you're iterating on what already exists. Strip out the…

People in this episode

Host: Phil McKinney

Topics covered

• innovation
• research and development
• financial pressure
• organizational funding
• definition of R&D

Keywords

• R&D
• innovation
• financial pressure
• research investment
• development

Mentioned in this episode

Organizations: US government, R&D

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