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The largest corporations dealing with research and development, from drugs and biotechnology to energy and electronics, are spending less on creating new knowledge, according to a new study.

The largest corporations involved in discovery have spent an increasingly large share of their dollars on developing and incentivizing existing knowledge and breakthroughs, according to the paper published in the Strategic Management Journal.

The analysis assesses the spending and investment trends from 1980 to 2006. The scope of the investigation extended to 4,608 ultimate owner companies, which included (in some cases) the largest entities owning subsidiaries.

All were listed in the U.S. annual Compustat database, and all had to have multiple years with positive R&D expenses in the study’s time frame, according to the findings. 

The econometric assessment involved 62,474 firm-year observations over that time frame.

The number of publications and patents, and the total accumulation of each, were assessed. Internal research spending – without outside publication – was also incorporated into the values. Some variables controlled for as part of the statistical context were the corporation’s market value, R&D stock, and the total assets of the entire organization.

The industries spanned from the aforementioned drugs and energy producers, to include telecommunications, machinery equipment and systems (e.g., manufacturing and sales of components and instruments), and electronics and semiconductor development.

The conclusion of the trends: scientific publications per capita declined over the 26 years, and the value placed on scientific discovery was lowered, as well. But the value of patents and technical knowledge that could be leveraged for profits remained stable.

“Large firms still value the golden eggs of science (as reflected in patents), but seem to be increasingly unwilling to invest in the golden goose itself (the internal scientific capabilities,” they conclude.

The lead author of the paper is Ashish Arora, professor of business administration at Duke University. He said in a statement that the need for scientific discovery is as acute as always – but may require assistance from beyond the entities with need to feed profit margins.

“The patents filed by these firms continue to cite the scientific literature at the same rate as before. This implies that a societal value of research has not declined,” Arora said. “We therefore need to investigate why the private value to corporation on engaging in research has declined.

“It also suggest that public support for research may be more valuable than ever,” he added.

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