Professional Pilot, February 2019
POSITION HOLD an editorial opinion R D investment by tech corporations has been less in current years when compared to GDP growth Rather than investing in research and development big aerospace companies are growing by observing those involved in the booming innovation market and buying up the ones that are involved in promising areas W ith the United Technologies Rockwell Collins deal the Boeing Embraer deal the Airbus Bombardier deal along with Japan Airlines 10 million investment in Boom Technologies Boeings acquisition of Aurora Flight Sciences and Joby Aviations 8 PROFESSIONAL PILOT February 2019 raising of 100 million in venture capital supersonic pilotless flight electric aircraft propulsion respectively its hard not to think about merger acquisition activity in the aerospace sector This is inexorably tied to Research and Development R D spending and innovation In 2004 Supreme Court Justice Antonin Scalia argued that monopoly power was a good thing The opportunity to charge monopoly prices at least for a short period induces risk taking that produces innovation and economic growth In sum large monopolistic organizations will provide the market with product development Scalias supposition appears to have been dead wrong Between 1994 and today the Fortune 500s percentage of GDP has risen from 58 to 67 and has been as high as 73 in some years Yet according to the National Science Board US R D growth averaged 14 annually from 2008 2015 versus 36 from 1998 2008 Average US GDP growth for those same years respectively was 15 and 22 In other words not only was R D growth less in absolute terms but suffered even more so when contrasted to GDP growth And this occurred as large corporations were becoming even more dominant By Bob Rockwood Managing Partner Bristol Associates Average R D Growth Average GDP Growth 400 350 300 250 200 150 100 050 000 Average R D vs GDP Growth US 98 08 08 15
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