Global businesses R&D plans are at a six-year low

Businesses’ plans for investing in research and development are at a six-year low, say senior managers at 2,500 companies in 36 economies.

The research, by Grant Thornton, suggests the drop is especially noticeable in large economies with high-skilled manufacturing sectors such as the US, Germany and Japan.

In the US, 11 per cent of businesses said they expected to increase their spending on R&D over the next 12 months, a three-year low. Thirteen per cent of Japanese companies planned to up their expenditure — an 18-month low — and just 6 per cent of German companies planned to do so. This was the lowest since 2010 when the research began to be conducted quarterly rather than annually.

Ed Nusbaum, global chief executive of Grant Thornton, said: “Given that research and development is the bedrock of future innovation, it’s troubling to see global business plans at such a low. The last situation any company wants to face is playing innovation catch-up.”

The research suggests the proportion of companies globally that plan to increase their R&D expenditure was a net 18 per cent in the first quarter of 2016, the lowest figure since 2010, and a sharp fall from 31 per cent in the first quarter of 2016.

The findings come against a backdrop of fragile financial markets, oil price volatility, and political uncertainty — particularly in the US and UK.

“The International Monetary Fund warned developed economies at the end of last month that their long-term growth will depend on increased R&D investment,” Nusbaum said.

“These countries urgently need to tackle the low productivity which is hampering their progress and one way to achieve that is a continuous drive for greater innovation.”

Grant Thornton said the proportion of companies expecting to increase exports had also fallen to 13 per cent in the first quarter from 21 per cent a year ago. Companies in the world’s biggest trading nations reported some of the lowest levels of expectations, including Germany at 22 per cent, the USA at 8 per cent, Russia at 5 per cent, China at 4 per cent and Japan at 1 per cent.

However, difficulties in accessing finance — a core complaint of European companies during the financial crisis — appear to have eased. The balance of companies worldwide citing a shortage of finance as a major constraint fell slightly in the first quarter to 19 per cent.

“What’s puzzling here is that, while low central bank rates across developed economies mean companies are able to borrow more easily, this is not translating into investment for future growth. Clearly, easy access to finance is not enough to incentivise R&D investment among businesses,” Nusbaum said.

The research was based on interviews with more than 2,500 chief executive officers, managing directors, chairmen or other senior executives from all industry sectors conducted in January and February.

Story 9

Institute trains youths on hardware design

…winning team receive N1m innovation prize

CHINWE AGBEZE & FRANK ELEANYA

A select set of innovative students and young professionals from across Nigeria converged in Lagos to design hardware innovations at the inaugural Lagos Labs 2016 event last week.

The six-day workshop organized by the Design Institute Lagos drew participants who learned and applied hardware skills using 3D printer to build solutions for infrastructural issues in Nigeria.

According to Lotte Goos, Co-founder, The Design Institute Lagos, the idea grew out of the desire to be the catalyst for innovation in Nigeria.

“We came out with this concept to leverage some of the talents in Nigeria because I always knew that Nigeria is an incredibly entrepreneurial space. There are lots of young people eager to work but the hardware innovation is something new that has not been explored yet”, explained Goos.

International coaches with a combination of experience from welldone.org, Stanford, MIT, BCG and the Design Institute Lagos were on ground to train the participants who showcased a wide range of opportunities that the internet can bring to Nigeria.

“These are some of the fastest learners we have ever taught hardware. The participants’ enthusiasm, commitment, brilliance and willingness to learn was remarkable”, said Sean Jeffries, one of the coaches at the event.

The participants took turns to pitch their ideas and solutions which revolved around smart solutions transportation, power, health, safety and agriculture.

Opeyemi Adeyemi, a graduate of Electrical and Electronics Engineering form University of Lagos proposed an emergency response device to help citizens report incidents with the click of a button.

“The victim basically clicks a button which would be made in the form factor of a watch kit and the GPS coordinate of the location is sent to the system. The emergency response agent will also be equipped with this device which also reports their mobile location. The system basically maps the closest emergency agent to the victim’s location and sends them an alert that someone in that particular location is in trouble and needs help. The system will also report to nearby citizens who have this device alerting them of the incident within their jurisdiction”, Adeyemi explained

Olabode Olakanmi, another participant, presented a project that would estimate the actual power going out of transformers and energy consumption of houses connected to it.

“The work is to bring Internet of Things into our transformer systems that can report what is happening on the transformer to the maintenance centers. If there is any failure on any of the faces, it will report back to the maintenance office and then to higher authorities if the problem is not resolved after 24hours. If anyone has bypassed the metre, we can determine the amount lost on the transformer and check the house that is tapping power”, he said.

Akinmodun Bode’s idea was centered on a temperature monitoring system to prevent the effect of excessive heat on babies.

“The device will be attached to the crib to monitor temperature changes within that crib’s environment where the baby is located. If the temperature exceeds a particular threshold, it will send a signal using the technology we’ve been doing here to the mothers mobile through an application or where a fan attached to it can cool the baby to the required temperature”

iGas, the winning team received N1million Access Bank innovation prize having developed a monitoring system that tells how much cooking one has left and sends that information to their phone while the best three teams received mentorship to pursue their innovations further.

One of the teams developed a device that alarms one’s family when one is in danger and another built a monitoring system for soil to yield more crops.

Goos is optimistic that this will go huge with support from the right organization and individuals.

“Initially the process of getting sponsors was quite tedious but we are already getting positive responses from organizations and this makes me feel positive about where this could be going. We have the motivation and enthusiasm to make this grow”, she added.

“What started as a small idea grew into something much bigger in just a few months. We are excited to work towards the continued success and growth of the Lagos Labs. It’s a fantastic way to catalyze innovation in Nigeria”, said Toks Fagbamigbe, Co-founder, The Design Institute Lagos.