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Are Industrial Companies Cutting R&D and Capex Too Deeply?

Dramatic reductions in spending amid the Covid-19 pandemic could threaten growth once the economy rebounds.

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Are Industrial Companies Cutting R&D and Capex Too Deeply?
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Most industrial companies have reduced their spending on R&D and capital expenditures this year, compared with 2019, according to a recent Bain & Company survey of senior executives worldwide. It’s no surprise: The economic shock from the Covid-19 pandemic has made conserving cash and containing costs urgent priorities. Less than a third of companies surveyed have increased their R&D and capex budgets this year, while many have made dramatic cuts that could stunt their company’s growth potential once the economy rebounds.

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With budgets strained by Covid-19, industrial companies that selectively cut and thoughtfully invest can accelerate out of the recovery.

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