Measuring R&D Performance—U.S. and German Practices

Abstract

OVERVIEW:Comparative interviews with German and U.S. executives who used the R&D performance measures reported in a previous article (1) reveal differences in both the philosophy of measurement and the perception of its usefulness. Among U.S. managers, the most popular methods are patent counts, financial measures like rate-of-return, total quality management, audits, and cost/time performance assessments. The emphasis is on measuring outputs per input (e.g., patents per dollar spent). Most U.S. managers were distrustful of simple metrics, preferring an integrated combination of quantitative and qualitative methods. In contrast, the German managers distrusted most R&D metrics, particularly output measures, although they commonly used input measures like annual expense per R&D employee. These differences are related to a fundamental difference in the philosophy of science between the U.S. and Germany. However, the survey results show that a measurement philosophy somewhere between the U.S. and German extremes may be appropriate for both countries, and that they are actually moving in that direction.

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