RQ in the News
The Tax Cuts And Jobs Act (TCJA) Led To Buybacks Rather Than Investment
But the real question is whether the surge in buybacks is hurting economic growth. Professor Anne Marie Knott argues, no. A review of the evidence suggests that the companies that were most actively distributing cash to their investors were also the strongest companies.
Marrying Warren Buffett And Paul Romer: A Strategy For Value Investing In Technology
Paul Romer’s Nobel Prize winning theory formally links innovation to growth, emphasizing not just the amount of R&D spending, but its productivity. Indeed, there is no correlation between innovation spending and financial performance. The missing link of valuing R&D productivity which has eluded even the most sophisticated investors such as Warren Buffet is now coming squarely into focus.
Taking Stock: Share Buybacks and Shareholder Value
MSCI examines the impact from share buybacks on long-term value creation for investors, with findings that may challenge expectations. In consultation with Professor Knott, the report notes that “Companies who were best at R&D [as measured by RQ] over the past 35 years returned approximately double the market return.
Do You Know Your Research Quotient For R&D Spending?
How does your company determine how much to spend each year on R&D? Likely, a group of senior executives get together and decides what it will spend for R&D. So, one question is answered. What will we spend next year? But, the more important question is not answered. What is the right amount to spend on R&D? Each year management answers the “how much” question, but for decades management has never known if it is the “right amount” to spend.
There’s no Good Alternative to Investing in R&D
Even companies that claim to have a long-term orientation worry about whether R&D is worth the investment. A current concern among many institutional investors as well as corporations is that companies don’t get credit for long-term investments in R&D. Research by Professor Knott shows why companies, investors, and the nation will be better off if companies make long-term investments in R&D.
An Uptrend in U.S. R&D Spending: Possible Breakthrough Period Ahead
R&D spending is a complex subject.
Considerations must be made regarding whether money goes toward basic research, applied research, advanced development, or product development, as well as how much money is spent each year. It also matters in which sectors that money is spent.
R&D Spending Level: What is your Research Quotient
Determining how much to spend each year on R&D and product development is an issue that has plagued management for decades. Traditional methods used by R&D leaders to determine R&D spending levels are examined according to a new approach.
R&D Spending Level: What Is the Right Amount?
Determining how much to spend on R&D and product development each year is an issue that has plagued management for decades. It is a difficult question.
The Real Reasons Companies Are So Focused on the Short Term
2017 was a remarkable year for the markets. The S&P and the Dow indexes are up 18% and 19%, respectively. But this run-up isn’t based on solid business foundations. Quarterly profits have only increased 5% since 2012, but investors’ valuations of those profits (as measured by earnings per share) has increased 59% over the same period. What’s behind the disconnect?
AMA Podcast: Measuring Your Company’s RQ
We know people can be measured on a scale on intelligence, but what if we could do the same for businesses? Anne Marie Knott has done just that. She's here to talk about her RQ scale and how she uses it to measure the innovation output for companies worldwide.
How Innovation Really Works, with Dr. Anne Marie Knott
Onward Nation Podcast, by Predictive ROI, interviews Dr. Anne Marie Knott is the author of “HOW INNOVATION REALLY WORKS: Using The Trillion-Dollar R&D Fix To Drive Growth.”
That’s What’s Magic
Most companies calculate their target R&D spend as a percentage of their sales, yet this method of calculation does not lead to optimal R&D productivity. In fact, its inaccuracy opens up an opportunity for investors.
Measuring R&D Productivity
R&D carried out by Oshkosh Corporation, a company that designs and builds specialty trucks and truck bodies, provides more bang for the buck than that performed by Google, Netflix, and other denizens of Silicon Valley. In-house R&D typically produces better results than the outsourced variety. Research productivity varies markedly from company to company within an industry but differs little from industry to industry. And effective optimization of spending on R&D could increase the value of a group of major American firms by a 13-figure number.
What the Two Most Innovation Friendly States Have in Common
For years people have recognized that industries cluster geographically, and that the clustering can lead to superior rms. For example, the best watches come from Switzerland, cars from Germany, and pharmaceuticals from the U.S. Back in 1880, economist Alfred Marshall noted that industrial districts benefit from labor market pooling and spillovers.
The Sexy R&D Behind Boring Chip Companies
When lists are generated of the hottest companies and trends in technology, the dominant words have become predictable: mobile, viral, cloud, big data and wearable. These are the niches that will define the future. Noticeably absent: silicon, semiconductor and microprocessor—or, in other words, the foundation for the revolution in modern computing.
End This Corporate Tax Giveaway: R&D Tax Incentives
One of the bills before Congress this year makes R&D tax credits permanent at an estimated cost of $156 billion over the next decade. They haven't delivered on their goal to reverse the dramatic decline of R&D, and in an era of hotly debated corporate tax reform, this cut is easy to make: It's time to end R&D tax credits.
The R&D Elite of the Market: CNBC RQ50
The CNBC RQ 50 is a new ranking of the most innovative companies in the market. From old-guard sectors, including industrials, oil and gas and defense to toy makers and some of Silicon Valley's elite, the R&D cultures within the RQ 50 companies prove that innovation isn't just about spending big, it's about a relentless long-term focus on R&D that optimizes return on innovation to shareholders.
Can You Get Better at Research?
It's widely accepted that people's innate intelligence doesn't change much. Youth, health, and a positive environment can help people make better use of their brains, but they can't do much to make the brains significantly better - at least on the weight of the evidence so far. But an organization's brains can change.
The Trillion Dollar Fix
How does a company know what kind of return it’s getting from R&D? Is it better at R&D than the competition? How much should it be spending, and what can it do to improve the effectiveness of its investments?
Don’t Cripple Innovation for the Sake of This Quarter’s Numbers
When hard times hit and revenues fall, R&D is always a tempting target for corporate cuts, because reductions yield quick increases in profit, and it has always been easy for executives to tell themselves that cutting research a bit today probably won’t hurt all that much over the long run.