Recent research (Gumings, Trey & Knott, 2017) estimated that R&D across industries has dropped by 60% in the past 40 years. Interviews with technical leaders identified a common theme - leadership change is the most significant cause of the R&D reduction, especially when outside CEOs join.
Researchers discovered that Outside CEOs tend to focus on ROI instead of long-term company strategy. They rationalise spending and reduce investment in L&D. Outside CEO’s background affects how much reduction will likely occur - CEOs from high L&D investment firms or industries tend to manage R&D better.
References
- Cummings, T & Knott, A M, Outside CEOs and Innovation (December 2, 2017). Available at http://dx.doi.org/10.2139/ssrn.2912468