Report on R&D Spending is becoming less meaningful. It's time to make changes. May be a new Index?

I was looking at the 2018 Internet Trends Report by Mary Meeker. It has a chart showing how technology companies outspend companies in other sectors on CAPEX and R&D. The only thing is there is no correlation on performance. For example, some companies like AT&T and Intel have to spend a lot of money on CAPEX just because of the business they are in. Another thing is spending more on R&D does not mean getting more in revenue.

Remember Xerox. They did a lot of amazing things in R&D but they were not able to capitalize on their innovations and generate more revenue. If we look at companies like Apple, Facebook and Google, their stock valuation and revenue outnumbered many companies in terms of percentage spend on CAPEX and R&D.In other words, they are generating better return on CAPEX and R&D for their companies and shareholders.

Talking about R&D without measuring the effectiveness of turning R&D into revenue is not meaningful anymore. Time for a change. May be using a new index which shows ROI on CAPEX and R&D.