Redux: What if the Red Cross only spent 10% in charity?

Much as I love the tech industry, I dislike the fact that it spends so little in R&D - and in contrast spends 3,4,5X in SG&A. When you question it, the typical response is more R&D would be wasted. In that case, why not give it back to consumers and let them spend it more efficiently? If your favorite charity only contributed 10% towards needy causes, you would not send them much the next year. If your local government did that, there would be impeachments galore.

CIOZone lists R&D spend by large vendors - on average 9.7% of revenue. Measly as that is, outsourcers and telecom vendors spend even lower (You do not see a Verizon or an Accenture on the list. IBM and HP show in this list because of their R&D spend in software, chips and printers. Their outsourcing groups invest only 1-2% of revenues). And since they make up over 50% of many IT budgets you can see how poor the innovation quotient is in most IT budgets. And with software vendors, quite a bit of the R&D actually goes towards fixes, patches, localizations - not really innovation.

It brings out even more clearly that if CIOs want more fiber/less fat in their IT diet they need to move  dollars from larger vendors to smaller, startups which typically spend much more in R&D and innovation or to their own innovation "tiger teams."