This August, Bank of Canada Governor Mark Carney spoke of Canadian companies sitting on half a trillion dollars of what he called, “dead money.” http://www.theglobeandmail.com/report-on-business/economy/free-up-dead-money-carney-exhorts-corporate-canada/article4493091/ This money sits in the bank accounts of Canadian corporations, providing …show more content…
It’s hard enough to convince C-level executives to keep the economy moving when they are currently, “getting out of bed every day …show more content…
While market demand, internal productivity, and the skill level of the employees will determine the former, the latter is determined by the extend of intellectual property rights, specifically in patents. A positive outlook on both of these factors is necessary for a company to have confidence in the expenditure of R&D. How could a company have any confidence in their return on investment on R&D, if any other company could copy the design and reap the benefits, at a fraction of the expenditure? They could not. Companies’ expenditures on R&D would essentially subsidize the “free loaders” who would have a much higher rate of return on their expenses. This could result in an R&D stand off, as the first company choosing to invest would lose the net profitability to the free loaders. The economic impact of an R&D stand off would be enormous. Between 2000 and 2004, R&D accounted for over $113 billion in US manufacturing expenditures in industries accounting for nearly 15 million employees.