US tech companies slow R&D growth

Research and development spending in some of the biggest US IT companies is being cut, even though the technology sector continues to enjoy strong growth.

Almost all of the ten biggest US names in IT displayed hesitant spending behaviour in R&D last year, the Financial Times reports. This trend is not expected to end any time soon, as the US economy continues to worsen.

The average growth in R&D spending in 2007 for these companies was 10.3 per cent, a figure slightly skewed by one business on the list. At a time when most of the top ten companies kept their spending growth in the single digits, internet giant Google chose to up its by 73.3 per cent.

Without Google's contribution, leading US tech companies averaged only a 4.1 per cent increase in R&D spending.

In a distant second after Google was software maker Oracle, which pumped up R&D spending by 17.3 per cent. Not every company chose to increase spending last year, however; semiconductor makers Intel and Texas Instruments both cut back by around two per cent, as did Sun Microsystems.

Rounding out the list are Microsoft (8.2 per cent), IBM (0.8 per cent), Cisco (10.6 per cent), Motorola (7.9 per cent) and Hewlett-Packard (0.6 per cent).

This year's growth in R&D spending fell short of the 2006 year-on-year figure, which was 11.6 per cent for the same ten companies.