utilizing a variety of vehicles to satisfy their R&D
needs. These include outsourcing (35% of the
survey respondents), utilizing consultants (36%),
creating new R&D collaborations (42%), increasing project prioritizations (43%) and employing
computer-based resources (20%).
R&D Budget Planning Challenges
When surveyed concerning their 2019 R&D budget planning process, about half of the respondents stated that their budgets are more difficult
to create now than they were just two or three
years ago. Only 10% of the respondents said it
was less difficult now, and about a third said there
was no change.
Making adjustments to account for potential
staffing shortages is one factor that complicates
the creation of a 2019 R&D budget. Potential technology
changes that include cloud computing, automation and AI
can also complicate the creation of a new budget—factors
that were not as strong just three years ago.
While R&D staffing concerns and their potential solutions
are mentioned above, the continuing strong economy and
strong R&D growth also work to increase the overall staffing
requirements for 2019. According to our survey, nearly half
of the survey respondents expect to increase their R&D staffs
in 2019. Most of those expecting an increase (38%) only
expect a slight increase (less than five positions), while about
7% of the survey respondents expect a substantial staffing
increase ( 25 or more positions) in their new R&D budgets.
The new R&D research positions will be used to develop
new technologies and support collaborations with academia,
other industrial technology organizations and the support of
R&D outsourcing efforts.
The changes expected in 2019 R&D work are likely to be
spread across all R&D functionalities. More than a third of
the survey respondents expect their applied research work to
be increased, while a quarter of the respondents will see their
basic research work increased. More than half of the respondents expect their development work to be increased. Less
than 10% of the respondents expect to see drops in basic or
More than a third of the survey
respondents expect their
applied research work
to be increased…
applied research and development.
The overall economy is expected to see slightly lower growth
in 2019 than was seen in 2018—2.5% growth in 2019 versus
2.9% growth in 2018. The October 2018 International Monetary Fund’s (IMF’s) economic forecast for 2020 is lower still (2%
GDP growth forecast). The global economy and even China’s
economy are expected to slow over the next two years.
While a new recession is not being considered, steadily
declining growth from that seen over the past 10 years following the recovery from the 2009 recession is a consensus
forecast. Most R&D managers are likely to be slightly conservative in their long-term R&D budgeting and in their staffing
requirements to avoid having to reduce their staffs in just a
year or two.
Difficulty Creating an R&D Budget
difficult than in 2016
than in 2016
R&D Staffing Changes Expected in 2019
Substantial increase expected
Slight increase expected
Slight decrease expected
Substantial decrease expected
0% 10% 20% 30% 40% 50%
Source: R&D Magazine Survey 2018