In 1997/98, Siemens’ investment in research and development decreased 65% over the previous year to £49.5 million. This explained Alan Wood, chief executive, at the company’s annual press lunch, was a consequence of the sale of Siemens Plessey Systems, a substantial investor in this area. On a like-for-like basis, Siemens’ investment in R&D declined by 9%.
He said that innovation was a primary driver for the company. To ensure it was a leader and not a follower in this increasingly competitive world it was committed to continuing investment in this area, albeit at a somewhat lower level than historically.
Siemens’ commitment to R&D can be placed in context when it is compared with investment in R&D by other organisations, Mr Wood continued. Siemens was placed 18th among all UK companies in the DTI’s 1998 R&D scoreboard, which was a significant commitment when you see the other companies listed.
Announcing the company’s performance for the fiscal year 1997/98 which showed a profit figure of £77 million, a 44% increase over last year, Mr Wood said, ‘The healthy trading environment Siemens plc enjoyed last year became more difficult in the course of the year which ended in September 1998. It will come as no surprise when I list among the key factors in this change the economic downturn in the Asian region. The recognition by the US that their own economy is no longer an island in the global marketplace confirms that the world is, indeed, a smaller place, and companies like Siemens must be competitive on truly global terms if they are to survive in this very demanding environment.’