Here’s another piece that highlights increases in research and devlopement spending as we exit the recession. Similar to what I wrote about the other day in regards to Panera, smart companies realize that spending on R&D now translates to better earnings in the future. 

“A typical company view was, ‘I cut capital spending because I don’t need incremental capacity with demand down,’ and SG&A is a bit of a necessary evil,” says Booz partner and report co-author Barry Jaruzelski. “But they cut R&D last; that’s the future revenue stream that these companies are protecting.”

As recently as earlier this decade the Apple iPod was born during a downturn.  Companies are wise to remember the past as they focus on spending with the future in mind.

There’s no question that 2009 corporate spending overall represented “a brutal hit,” says Jaruzelski. “But remember that even in the Great Depression, innovation didn’t stop. In fact, some of our biggest innovations came then, from the jet engine to the chocolate-chip cookie. Television was just being rolled out, and, by the way, Hewlett-Packard was founded in the 1930s.”

Read more at this link: http://www.cfo.com/article.cfm/14538872