Executives look to innovate in recession

Tasked with boosting productivity while keeping costs down, executives are increasingly looking for innovative ways of fuelling growth, it has been found.

New research carried out by the Wall Street Journal found that a number of leading companies are increasing the proportion of their annual budget that goes on research and development in a bid to improve their bottom line in the long-run.

For example, executives at the technology company 3M recently agreed to step up research spending as a percentage of revenue from 5.4 per cent to 5.7 per cent, despite the pressures on board members to cut all outgoings.

Speaking to the newspaper, chief executive George Buckley explained that research and the development of innovative business methods and products is crucial for future growth and cannot be neglected, regardless of potential short-term savings.

"If we cut back on that, we'd damage and potentially ruin the company," he said, adding that economic downturns are generally the best times to be innovative in business, whether in product development or board recruitment.

At the same time, however, Nokia is starting to make a planned 220 research and development job cuts in Japan.