Investing in the Future
Investing in the Future
05.25.11 | By
I was intrigued by a Reuters article I saw talking about General Electric and its renewed commitment to investing in research and development. The company clearly views increasing investment in R&D as the pathway to a secure future.
Innovation: Businesses should invest more of their cash and resources in advanced products and technologies that will create jobs in the United States, and government should incentivize this investment in innovation. Today, GE is investing more than ever in research and development -- about 6 percent of revenue -- aimed at solving challenges in transportation, energy and health care. As one of America's largest exporters, GE remains committed to producing more products in the United States, which is our home and largest market. In the past two years, GE has created about 6,000 manufacturing jobs in the states, many resulting from investments in innovations such as advanced batteries, which we will make at our 100-year-old plant in Schenectady, N.Y.
GE is an innovative company in an innovative sector. Clearly, Immelt and GE understand the need to invest in R&D as the source for future growth and innovation, and GE is committing significant resources to that effort. GE also understands the role it and its sector play in the larger economy, the creation of jobs and the prospect for economic recovery.
Though there are great differences between the manufacturing and technology sectors and the biopharmaceutical research industry, the commitment to investing in the future is similarly strong. Indeed, America's biopharmaceutical companies have long made significant investments in innovative R&D. In fact, in 2010, companies in the biopharmaceutical research sector invested 20.5 percent of sales in new R&D and have averaged more than 19 percent annually in recent years.
Taking nothing away from the strides companies like GE and other businesses in the manufacturing sector are making to invest in innovation, the biopharmaceutical sector is one of the most R&D intensive in the United States. Last year alone, the companies in the biopharmaceutical research sector invested $67.4 billion (an increase of nearly $2 billion over 2009) in new R&D, with PhRMA member companies contributing $49.4 billion.
In short, if you're looking for a model of a sector that is investing in the future, you need look no further than America's biopharmaceutical research companies.