MANAMA: Total research and development (R&D) spending among the world's top spenders on innovation dropped in 2009 for the first time in 13 years, the sixth annual study of corporate innovation spending by global management consulting firm Booz & Company reported Thursday. “It's no surprise that the worldwide recession finally caught up with the world's top innovation spenders in 2009, causing them to trim their innovation budgets,” Booz & Company lead economist Hatem Samman said. “However, the relatively modest cuts in R&D spending compared to much larger declines in revenues demonstrates the continued importance of innovation as a critical component of corporate strategy to companies in every industry. “As the recession draws to a close and corporate earnings rebound, 2010 will be an important test of their commitment to innovation. Indeed, the most forward looking companies will likely move quickly to restore the R&D cuts they made in 2009,” he added. It said the 1,000 companies that spent the most on research and development decreased their total R&D spending by 3.5 percent to $503 billion in 2009 as compare with a relatively strong spending in 2008 despite the recession. The report noted that only Saudi Basic Industries Corporation (SABIC) was included in the Innovations 1000 list from the Middle East. SABIC's European campaign at “K-Fair”, the leading fair for the global plastics industry, is based on the company's technology, innovation, and R&D leadership. SABIC holds slot number 501 in the 1,000 list and is one of the world's top spenders in innovation, outperforming many of its competitors. Total R&D spending by SABIC dropped by 7.3 percent from $152.3 million in 2008 to $141.2 million in 2009. Other chemical companies had cut their R&D spending significantly more during the crisis period. Meanwhile, the net profits of 292 companies out of the 663 firms listed in the Gulf Cooperation Council (GCC) stock markets stood at around $25.4 billion in the first nine months, an increase or about 24 percent compared with the first nine months of 2009, Markaz Financial Center said Thursday. Third quarter earnings of the companies, which account for nearly 80 percent of the total market capitalization in the region, also surged by 16 percent to $8.7 billion over the third quarter of 2009 and by around three percent over the previous quarter, Markaz said in its latest study. “The commodities sectors' impressive performance was the main factor for the high profit growth in some member states,” it noted.
