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New R&D hotspot: France?
March 23, 2007
Innovation is moving to France as R&D becomes passé in US. That’s the message of an item titled “The American Century is Over,” on the Motley Fool Website. The key evidence: Bell Labs, the brain trust behind transistors, laser beams, stereo recording, television and HDTV, solar cells, superconductivity, and many of the Internet's enabling technologies, is now owned by a French company Alcatel-Lucent. Says the Fool, “Even among those still-American companies with strong R&D heritages, the trend is somewhat frightening…the new R&D model seems to include significant outsourcing and offshoring.”
The article continues, “A company can sacrifice R&D for short-term cash-flow gains, but in a competitive economy dependent on innovation, such a move usually comes at the expense of long-term prosperity.”
The article cites an example from the pharmaceutical industry: “…the new R&D model seems to include significant outsourcing and offshoring. Large American pharmaceutical companies now fund compounds that make it through early-stage trials at start-ups and foreign firms. In return, they get paid to provide marketing muscle following regulatory approval. You can see that dynamic in the relationship between the American Bristol-Myers Squibb and the French Sanofi-Aventis for the blood-clotting treatment Plavix.”
Now, the Fool has incentive to belittle US R&D efforts in the article, which in fact is promoting the Motley Fool Global Gains international investing service. But I’ve previously bemoaned the decline of US basic research in general (see here and here, for example) and lamented the fate of Bell Labs (see here, for example), and the Motley Fool’s take seems about right.
Posted by Rick Nelson on March 23, 2007 | Comments (0)
