28 October 2002 21:20 [Source: ICIS news]
HOUSTON (CNI)--Every dollar invested in chemical research and development (R&D) today produces an average annual return of 17% after taxes over six years, members of the American Chemistry Council (ACC) were told Monday.
"Research is rewarding for our industry," said Robert Armstrong, Chevron Professor at Massachusetts Institute of Technology in Cambridge, Massachusetts. "Business performs better when public policy, including government funding of R&D, is consistent."
Speaking at the 2002 leadership conference of the ACC at the JW Marriott hotel here, Armstrong noted that research spending in the chemicals sector grew from 2.47% of sales in 1980 to 4.7% in 1999.
That contrasts with the pharmaceutical industry, which spent 12.14% for R&D over the same period.
In addition, the chemical industry’s share of total US R&D declined from 11% in 1956 to 8% in 1992.
Armstrong noted the contribution of chemical R&D to corporate performance and value is very significant adding that investors "appear to fully appreciate R&D contributions."
Armstrong quoted Baruch Lev, author of an industry R&D study who noted that the chemical industry’s engine for growth is like a Volkswagen beetle engine in a Ford explorer SUV.
Said Lev: "It is a terrific engine, but it is relatively small. Is it powerful enough to somehow elevate and transform the entire industry?"
The ACC conference and 130th annual meeting concludes Monday.
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