Measuring Your Productivity: R&D Metrics for Manufacturers

Globalization, business alliances, open innovation, and improved organic innovation initiatives to gain strategic advantage in this era of global competition are driving significant changes in measurement practices for innovative functions. The depth of the recent recession augmented the rate of change.

GGI's 2013 findings indicate that there is now a clear industry-wide focus for R&D metrics to address business results. That has not always been the case. GGI has been tracking the R&D and Product Development metrics used by industry for twenty-five years, and regularly for the past fifteen years. "Business results" does not equate to conservative portfolios either. There are also more risk monies being spent. But, a host of newly developed processes to oversee risky and exploratory activities keeps the business focus and is causing a need for new metrics. The sand box definitely shrunk in the past five years. The entire portfolio is receiving increased scrutiny.

Finally, intellectual property is increasingly being used as a revenue and profit generation tool; and, as a revenue and profit protection tool.

In summary, R&D productivity improvements are being driven by a combination of "business environment" factors and the "maturation of the monetizable IP marketplace." Existing metrics are being elevated or demoted to support today's needs and opportunities. New metrics are being created to measure R&D areas that have not previously existed, or were not previously of a size or importance that warranted corporate measurement.