Toyota's Projected Growth -- And the Context of Booz Allen Hamilton's Recent Innovation SurveyReena Jana
Last year, as my brilliant colleague Jessie Scanlon wrote on BusinessWeek.com, the annual Booz Allen Hamilton survey on the top 1000 spenders on research and development concluded that “money simply can’t buy effective innovation.”
The proof: the top spender listed in the 2006 survey (based on 2005 data) was Ford – “hardly a paragon of innovation,” as Jessie wrote — a company that saw tremendous struggles the same year it spent $8 billion on R & D.
But this year, it seems that the story might be different.
Toyota, listed as the top spender in Booz Allen Hamilton’s newest survey, published earlier this month, has just stated that the company expects global sales to rise 6% from last year. (See the overview Jessie and I co-wrote of this report and other innovation surveys published in 2007.) The Japanese automaker hopes to innovate further in 2008 by focusing on vehicles for so-called emerging markets. The company has an ambitious goal to grow its sales by a whopping 20% next year.
In the context of innovation metrics and the recently released Booz Allen Hamilton survey, can Toyota’s case be seen as helping us see some correlation between R & D spending and innovation ROI? Or, in the context of last year’s survey – and the lack of correlation between Ford’s R & D spending and its track record of sales and innovative new products only a year ago – does it simply confirm that R & D budgets might not be an appropriate indicator of successful innovation?