CONFERENCE IN HEIDELBERG EXPLORES WAYS TO STRENGTHEN R&D & GENERATE HIGHER RETURNS THROUGH INNOVATION
18 May 2001 - European Institute for Research and Strategic Studies in Telecommunications GmbH (EURESCOM)

Another reason, according to Telcordia's Vice President of Applied Research, Dr. Robert Lucky, is that researchers have failed to provide hard evidence proving the return on investment from R&D activities. This contributes to the phenomenon that research results are often not properly valued within a company. Seemingly research results only get a value when a start-up company picks them up. Other participants criticised the short-term profit expectations raised by analysts. Magnus Madfors, Technology Director at Ericsson: 'We must convey the message to the analysts that research takes time.'

David Cleevely, Managing Director of Analysys, stated that a positive correlation exists between R&D and share value: 'Telcos, which invest more in R&D have better share price performance.' Dr. Michael J. Mandel, economics editor of Business Week, supported this view. He argued that companies that increase R&D during the 'valley', the tough market times, recovered faster. For him, increased R&D is necessary for the successful introduction of new services. Dr. Mandel stressed the importance of collaborative research to distribute some of the risks involved in R&D investments. Richard Soley, CEO of OMG, highlighted the advantages and effectiveness of collaborative work for developing international standards. Mike Donohoe, research director of eircom, stressed the importance of collaborative research for shortening the time-to-market of new services. Mr Donohoe gave the example of the Irish Virtual Private Networks service that was launched as a direct result of eircom participating in a EURESCOM collaborative project specifying the VPN service.

While there is a lot of evidence of the healthy return on investment from research, the experts agreed that improved evaluation methods, showing hard figures, are needed to reinforce the value of collaborative R&D in today's competitive environment. Robert Lucky is convinced that research offers companies a lot of potential success by providing options for the future: 'Giving options, this is what research is all about.'

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