Wednesday, April 23, 2008

ExxonMobil's R&D spending is 'tiny'

Michael Mandel, chief economist at BusinessWeek, looks into federal and private sector R&D spending on energy. The share of GDP for federal R&D has been steadily falling over time.

The private sector is the real eye-opener:

Take ExxonMobil, which according to its latest annual report "invested $3.5 billion in research and development over the past five years." That sounds like a lot of money--but of course over the same period the company had $90 billion in capital and exploration expenditures, $160 billion in profits, and an absolutely stunning $1.6 trillion in sales. Compared to the size of the company, and the size of the oil markets, ExxonMobil's spending on R&D was tiny. To put it another way, Intel--a much smaller company--spent $26 billion on R&D over the same 5-year period.

source: What About Energy?
Michael Mandel, chief economist at BusinessWeek

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