Boast, a leader in R&D and tax credit intelligence, has unveiled its 2024 R&D Benchmark Report, highlighting key budgetary concerns faced by CxOs across North America. The report, which surveyed over 500 executives from R&D-centric organizations, reveals a cautious shift in spending strategies as businesses navigated inflation, talent shortages, and broader economic uncertainties throughout 2024.
Despite the ongoing importance of R&D in driving innovation, many organizations scaled back their investment in it this year, focusing instead on short-term essentials. Boast’s report highlights that while working capital remains the primary source of funding, there’s been a marked rise in the use of credit lines, with 42% of respondents leveraging debt in 2024, up from 38% in 2023.
What’s most striking, however, is the missed opportunity for non-equity funding—particularly through tax credits and grants. Tax credits, once a top funding source, dropped from 39% in 2023 to 36% in 2024, while grants saw a sharper decline, falling from 32% to 27% year-over-year. These shifts suggest that businesses may have overlooked significant financial lifelines in their push to tighten budgets amid market volatility.
Boast CEO Imad Jebara commented on the trend:
“Broadly, while many CXOs still dedicated budget to R&D in 2024, they weren’t engaging in as much grant- or credit-worthy activities, and are probably paying the price for this conservatism in the long-run. While holding off on new R&D may seem like a ‘penny-wise’ strategy to ride out the markets and news cycle, pausing or scaling back R&D actually locks teams out of government funding opportunities that could be critical to stretching their product and innovation runways.”
Beyond budget cuts, the report also found a heightened focus on forecasting and talent retention among executives. Concerns over inflation, interest rates, and shifting venture capital dynamics drove many CxOs to adopt a “shoring up” mentality, further limiting the scope for innovation.
Ironically, the report suggests that more aggressive R&D funding could offer a solution to these challenges. By engaging in innovative, credit-worthy activities, businesses could unlock new streams of capital, thereby extending their operational runway while fueling stronger product development.
Boast’s 2024 R&D Benchmark Report underscores the importance of thinking beyond immediate concerns and leveraging available tools and data to make smarter, more sustainable investments. As organizations continue to face economic headwinds, the report argues that strategic R&D funding may prove critical to navigating the challenges ahead.
For a deeper dive into the findings, download the full 2024 R&D Benchmark Report or access Boast’s detailed analysis in their EBook.
