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Return on innovation investment (ROI2)
Strategic perspective
Operational processes and supply chain perspective
Key performance question this indicator helps to answer
To what extent are our investments in innovation generating a return?
Why is this indicator important?
Companies are spending on average 3.5% of their revenues on research, development and innovation activities. This can go much higher for manufacturing companies (around 7%) or high-tech or pharmaceutical companies (around 15%). While in accounting terms R&D spending is viewed as a sunk cost that has to be written off, companies see R&D as an investment in the future. They are hoping that their innovation pipeline (see previous KPI) is delivering future revenues.
Given ...
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