Research and development has risen sharply on the corporate agenda in the wake of the global economic crisis, a McKinsey survey finds.¹ Four in ten respondents report that both R&D budgets and activity levels are up this year relative to 2009. What’s more, executives are remarkably optimistic that the R&D moves their companies made during the downturn will serve them well in the coming three to five years.

These are among the findings of a survey that examined how senior executives view the current state of R&D, as well as how their companies’ R&D groups responded to, learned from, and were affected by the recent economic turmoil.

The survey suggests that some optimism is warranted: a sizable number of respondents say their companies will retain the usually beneficial changes made during 2009 to R&D organizations, infrastructure, or processes and will abandon fixes that likely helped in the crisis but aren’t needed in the longer term. Nonetheless, some executives worry that the cost-cutting moves their companies made in R&D during 2009 will have painful consequences, including a weaker talent pool and a loss of market share resulting from shriveled new-product pipelines.