Report: Hewlett Packard Has Tiny Research-and-Development Budget

Apple and HP are bottom in terms of percentage spending on R&D.

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    NEWSLETTERS

    TK
    AP
    Exterior view of Hewlett-Packard Headquarters in Palo Alto, Calif., Thursday, May 17, 2012. HP spends less as a percentage of its overall budget on R&D than it has in the past.

    The budget for research and development is seen as a barometer of how "innovative" a technology company will be.

    If that's true, Hewlett-Packard and Apple are some of the least innovative companies around, according to the San Jose Mercury News.

    Hewlett-Packard has repeatedly slashed its budget for research and development over the past two decades, according to the newspaper. In 1987, R&D comprised 11 percent of the Palo Alto company's budget; in 2012, R&D was 2.8 percent of HP's spending, according to the report.

    Only two companies -- one of them Apple -- spent less, percentage-wise.

    That said, the 2.8 percent was $3.4 billion -- and a company spokesman said that in 2012, the company received 1,200 patents.

    R&D "focuses on creating new products and services, or improving existing products and services," the newspaper reported.

    There is not "necessarily a direct connection between lavish R&D spending and innovation," the newspaper added, though HP CEO Meg Whitman has vowed to boost her company's spending on R&D.

    By comparison, Facebook spends about 27.5 percent of its overall budget on R&D, the newspaper reported.