In the last 12 months, companies in the S&P 500--excluding financial firms--collectively spent at least $133 billion on research and development, or 9% of total sales. (That number is a floor because some companies do not report R&D expenses explicitly.)
Some behemoths spend north of 15% of total revenues on R&D, including pharmaceutical giants Merck and Eli Lilly, communication-equipment makers Juniper Networks and Qualcomm, and computer chip makers Intel and Advanced Micro Devices. Gaming giant Electronic Arts blows a whopping 34% of sales on R&D.
Not that the hunt for hits only happens in-house. Companies also shell out big bucks on third-party market research shops. As of 2004, the global market research industry had ballooned to $18.9 billion, according to the Council of American Survey Research Organizations.
What new products and services do the next generation of consumers crave? To find out, we asked thoughtful high school students from around the U.S. In this first installment of our series--called Businesses That Don't Exist, But Should--the ideas run the gamut of industries from energy to health care. No gratuitous gadgets here.
To be fair, we have no idea how feasible any of these ideas are. Nor are we certain that someone, somewhere isn't working on them as you read this. Whatever the case, the high-schoolers' responses provide an insight into the minds of tomorrow's customers and competitors--information potentially valuable to entrepreneurs across the globe.
One thing is for sure: These kids have a great deal of faith in the advancement of science and technology. Take Ajay Gopalakrishna and Alex Myong, both 17, of International Academy in Bloomfield Hills, Mich., who envision a nanotechnology-based medicine used to treat fatty-liver disease.
Sophie Mae Friedman, 16, of City Honors School in Buffalo, N.Y., would like to see a "personalized pill" containing the right mixture of vitamins and medications any individual patient might need. Such a pill certainly would go a long way toward streamlining health care delivery.
International Academy's Kala Groscurth, 17, wants to help the speech-disabled with a machine that reads the lips of its owners--without requiring them to make a sound. In theory, she says, the device would also eliminate annoyances such as background noise and poor cellphone service.
Lower on the technology scale, duPont Manual High School's Joseph D'Annunzio, 15, wants to stop wildfires in their tracks. He proposes quickly deployable, fire-retardant netting that could contain the kind of conflagration that recently engulfed Southern California. Meanwhile, D'Annunzio's schoolmate, 17-year-old Taysha Farley, dreams of a hair-drying bonnet that would allow users to walk around, watch television, cook and run daily errands.
As ideas zip around global networks in the blink of an eye, getting an edge in the fight for the next big money-maker will only get tougher. Your best bet: Listen intently to your customers--especially the ones coming down the pike. And be on the lookout for the next installment of this series. Future fortunes may be at stake.