# to plan future income and spending

S.2226 - 118th Congress (2023-2024): National Defense Authorization Act for Fiscal Year 2024 » Summary of S.2226 - 118th Congress (2023-2024): National Defense Authorization Act for Fiscal Year 2024 Congress.gov

The Trillion-Dollar R&D Fix » Reprint: R1205D How does a company know what kind of return it’s getting from R&D? Is it better at R&D than the competition? How much should it be spending and what can it do to improve the effectiveness of those investments? Existing measures of R&D effectiveness don’t answer any of those questions. In this article Anne Marie Knott, a professor at Washington University’s Olin School of Management, presents a new metric for R&D productivity: RQ, short for research quotient. It allows managers not only to estimate the effectiveness of R&D investment relative to the competition but also to see how changes in R&D expenditure affect the bottom line and, most important, a company’s market value. According to her research, if the top 20 firms traded on U.S. exchanges had increased their 2010 R&D investment using the RQ method, the collective increase in market cap would have been a whopping $1 trillion. The longer-run benefits are potentially even greater because the measure allows companies to more closely Hbr.org