Additional Results from the Innovation Finance Snapshot

In addition to the conclusion that confidence is surprisingly high in R&D, the Puntios Innovation Finance Snapshot results indicate that investment is returning to pre-recession levels.  It also however shows that PLCs could be doing much more to leverage R&D finance, and that the recovery in the manufacturing sector is weaker than other sectors.

Confidence is surprisingly high in the current climate

71.4% of all respondents reported starting new R&D projects in the past 12 months.  However, with a multiple choice response, respondents also noted:

- Stopped or temporarily shelved projects.  44.9%

- Cancelled planned R&D projects. 18.4%

- Postponed starting planned projects. 42.8%

This indicates a more complex picture, with companies generally investing, but focusing on core activities.

Investment returning to pre-recession levels

For those companies reporting a decrease in R&D budget since the beginning of the recession in 2008, the majority expect budgets to return to the pre-recession level in either 2013 or 2014.

PLCs could leverage more R&D finance through collaboration

The majority of SMEs reported that R&D finance is through a mix of customer funding, grants and the company’s own resources.  28% reported that their R&D was 76-100% financed from their own resources.  For non-SME respondents, the figure was 57%.  This suggests that PLCs and larger companies could use their R&D spend to leverage more R&D finance by collaborations, as is more common among SMEs.

Manufacturing is more fragile than software and other sectors

In software, almost 90% of companies started new R&D projects in the past twelve months.  58% saw increased budgets, and only one respondent reported a decreased budget.  The cancellation rate was 16%.  (Note sample size smaller so results are indicative only).

In manufacturing/physical processing, 69% started new R&D projects.  35% saw increased budgets, and the cancellation rate was 31%.

This demonstrates a marked difference between manufacturing and software, and indicates that recovery and confidence in the manufacturing sector is slower.