Corporate R&D Innovation Trends

A major shift in U.S. defense doctrine was unveiled on July 10, 2025, when Secretary of Defense Pete Hegseth announced a new drone policy aimed at achieving unmanned dominance by 2027. Highlights: -Drones are now considered expendable munitions, not precious assets -Field commanders can deploy and test 3D-printed and COTS drones without HQ approval -The DoD will fast-track production of American-made drones for frontline use This reflects a clear pivot toward agility, speed, and distributed capability—less red tape, more rapid innovation. It’s a direct response to the evolving nature of modern warfare, particularly lessons learned from Ukraine, where drones have played a decisive role. But the announcement comes with strategic tension. Hegseth has also halted military aid to Ukraine, citing concerns over U.S. stockpiles—a move that contradicts internal Pentagon assessments and is already drawing criticism on Capitol Hill. The challenge ahead: scaling domestic defense capabilities without signaling retreat to global allies. At the same time, peer nations are accelerating. India just announced a $234 million incentive program to build up drone manufacturing. Russia is launching record volumes of drone strikes in Ukraine. The race for unmanned superiority is well underway. This is more than a tactical shift—it’s a redefinition of how we project power. How do you see this reshaping defense procurement, alliance dynamics, or innovation strategy? #DefenseTech #DroneWarfare #USMilitary #NationalSecurity #Strategy #Procurement #Hegseth #PolicyShift #Innovation #Geopolitics

The World Economic Forum’s #FutureofJobsReport 2025 has just been published, on January 9th, and as always, it offers fascinating insights into the shifting dynamics of the global job market. It is a long report, with lots of valuable data. From my perspective, this chart may be the most interesting view included in it. A goldmine for reflection and strategy. The #fastest_growing_roles are - almost all of them - dominated by #AI: Data Specialists, Machine Learning Experts, FinTech Engineers, etc. Notably, green tech (e.g., Renewable Energy Engineers, Environmental Engineers) is also surging. This underscores how deeply intertwined AI and sustainability have become in shaping our economies. Organizations investing in these areas are not just future-proofing their business—they’re building the future. On the other end, #declining_roles reflect a shift toward #automation. Jobs like Bank Tellers, Cashiers, and Data Entry Clerks are rapidly shrinking, displaced by technology that offers efficiency and cost savings. While this presents significant challenges for those in these professions, it also highlights the urgent need for upskilling and reskilling. Some Implications for Leaders: 1. Talent Strategy Must Evolve: Leaders need to focus on cultivating talent pipelines for roles that didn’t exist a decade ago. From DevOps Engineers to UI/UX Designers, the demand for skills at the intersection of technology and creativity is exploding. 2. Reskilling is Non-Negotiable: Companies must view reskilling as an investment rather than a cost. Employees in declining roles need pathways into emerging professions—this is as much about social responsibility as it is about long-term competitiveness. 3. AI Adoption is Key—but Ethical AI Even More So: The integration of AI isn’t just a trend—it’s a foundational shift. But as we adopt AI in business processes, ensuring ethical and inclusive implementation will differentiate the winners from the rest. In addition, this chart doesn’t just speak to business; it speaks to the broader socio-economic fabric. The gap between the “haves” and “have-nots” in terms of skills is growing. If we fail to address this through public and private partnerships, we risk creating a polarized workforce—one half thriving in high-growth industries and the other struggling in declining sectors. For me, the biggest takeaway is that growth and decline are two sides of the same coin. Where some see loss, others see opportunity. The challenge is ensuring we don’t leave anyone behind in this transition. I really hope that our government leaders, educators, institutional representatives, top managers, and as many people as possible will see, understand, and act based on this data...

In an era of peak ambiguity, shifting geopolitical tensions, and asymmetrical warfare, our defense posture won’t just rely on the quality of software we can build; it will rely on the speed in which we can adapt, iterate, and deploy new innovation. As my partners Paul and Alexa recently wrote in their piece on the rise of applied software for hardware-intensive industries, we're entering a new era where software is no longer layered on top of the physical world—it’s integral to development from the start. We believe deeply in software-defined hardware as a driver of future resilience. That belief underpins our investments in defense companies like Helsing, Anduril Industries, Applied Intuition, and Saronic Technologies. But software-defined hardware is just one piece of the equation. There’s a broader ecosystem that is needed to scale innovative hardware. A key part of this is software for testing and deployment. One of the most persistent bottlenecks in innovation is proving real-world viability. In many sectors, a few hacker-engineers can scrape together an MVP, ship a small batch of prototypes, and iterate from there. But for the defense companies, the high standard for validation in the real world is costly and complex. As an example, autonomous aircraft can be built in months, but take years to certify. Companies like PhysicsX and Nominal are tackling testing and simulation to reduce waste and shorten development timelines, while enabling superior product design. PhysicsX delivers deep learning–based simulation software, embedding intelligence across the entire product lifecycle, from concepting and design to manufacturing and operations. And in the field, Nominal collects, structures, and activates raw field signals to give operators and engineers real-time visibility into how complex systems are performing. These systems aren’t just for tech-native startups. They can support mechanical, electrical, and aerospace engineers at legacy firms, streamlining processes and unlocking innovation across incumbents and emerging players alike. We’ve embraced “build, test, learn, repeat” in the software world. Now we need to bring this to the hardware world with purpose-built platforms that understand the nuance of development in critical industries. We need tools that make fast, continuous iteration possible. Resilience begins with rethinking how we build, test, and deploy in the physical world. Read more from Paul and Alexa here: https://lnkd.in/gih37kyY

The future of manufacturing won’t be written by those who simply build, but by those who build smart.     Deloitte’s 2026 Manufacturing Industry Outlook makes it clear: in a world of supply-chain complexity and talent shortages, targeted tech investment, not just expansion, will define competitiveness. Manufacturers face a choice: retrofit or digitalize. That means moving from isolated, hardware-centric systems to software-based platforms, connected IoT architectures, AI-ready control systems, and a workforce equipped to optimize them. At Schneider Electric, we’re driving this shift with open, software-defined automation and AI-powered solutions that deliver agility, resilience, and competitive advantage. But technology alone isn’t enough. Industry faces a dual challenge: an aging workforce and a generational shift toward tech-driven, purpose-led roles. To stay competitive, companies must create future-ready jobs that combine flexibility, sustainability, and innovation. The numbers speak for themselves: ✅Global manufacturing could face an 8M worker shortage by 2030 ✅In Europe, Japan, and the U.S., 25–40% of industrial roles are held by employees aged 55+ ✅By 2035, Gen Z and Gen Alpha will make up 50% of the workforce, reshaping expectations for tech-driven roles Lasting transformation depends on people: training engineers and operators for a connected, automated factory floor. Investing in human potential is as critical as investing in hardware or software. The next era of industry will belong to those who transform with purpose, creating smarter, cleaner, and more human-centered manufacturing. At Schneider Electric, we’re proud to lead this journey. 👉 How is your organization preparing for this shift?    You can read the full report here: https://bit.ly/3Mqi0Et  

🚨 𝐍𝐞𝐰 𝐒𝐭𝐮𝐝𝐲 𝐬𝐡𝐨𝐰𝐬: 𝐆𝐞𝐫𝐦𝐚𝐧𝐲’𝐬 𝐈𝐧𝐧𝐨𝐯𝐚𝐭𝐢𝐨𝐧 𝐄𝐧𝐠𝐢𝐧𝐞 𝐤𝐞𝐞𝐩𝐬 𝐒𝐭𝐮𝐭𝐭𝐞𝐫𝐢𝐧𝐠 📉 Today I discussed the results of the new Innovation Indicator by BDI - Bundesverband der Deutschen Industrie e.V. & Roland Berger with Handelsblatt and ntvNachrichten. 𝐌𝐲 𝐜𝐨𝐫𝐞 𝐭𝐡𝐞𝐬𝐢𝐬: There will be no economic upswing in the near future unless we radically change our approach: 🚀 Fast-track digital technologies into real-world applications. 🔓 Open up corporate innovation 🧠 Embed an open digital mindset into Germany's famous, but closed engineering culture of perfection. 🛑 𝐈𝐧𝐜𝐨𝐧𝐯𝐞𝐧𝐢𝐞𝐧𝐭 𝐭𝐫𝐮𝐭𝐡𝐬: 👉 𝐒𝐭𝐮𝐜𝐤 𝐢𝐧 𝐏𝐥𝐚𝐜𝐞: Germany is ranked 12 out of 35 for overall innovation capability (same as last year) 👉 𝐃𝐚𝐧𝐠𝐞𝐫𝐨𝐮𝐬 𝐃𝐞𝐩𝐞𝐧𝐝𝐞𝐧𝐜𝐲: A staggering 40% of corporate R&D comes from the automotive sector alone. 👉 𝐋𝐨𝐬𝐢𝐧𝐠 𝐆𝐫𝐨𝐮𝐧𝐝 𝐢𝐧 𝐅𝐮𝐭𝐮𝐫𝐞 𝐓𝐞𝐜𝐡𝐧𝐨𝐥𝐨𝐠𝐢𝐞𝐬: Companies are globally falling behind in future growth fields like AI, Software, Microelectronics, and Biotech. 👉 𝐓𝐡𝐞 𝐂𝐨𝐦𝐦𝐞𝐫𝐜𝐢𝐚𝐥𝐢𝐳𝐚𝐭𝐢𝐨𝐧 𝐆𝐚𝐩: Excellent research, but bad at turning it into products. 𝐆𝐞𝐫𝐦𝐚𝐧𝐲 𝐢𝐬 𝐬𝐭𝐮𝐜𝐤 𝐢𝐧 𝐭𝐡𝐞 "𝐌𝐢𝐝-𝐓𝐞𝐜𝐡 𝐓𝐫𝐚𝐩": 𝐖𝐨𝐫𝐥𝐝-𝐜𝐥𝐚𝐬𝐬 𝐢𝐧 𝐦𝐚𝐭𝐮𝐫𝐞 𝐢𝐧𝐝𝐮𝐬𝐭𝐫𝐢𝐞𝐬 𝐰𝐢𝐭𝐡 𝐥𝐢𝐦𝐢𝐭𝐞𝐝 𝐮𝐩𝐬𝐢𝐝𝐞, 𝐛𝐮𝐭 𝐰𝐞𝐚𝐤 𝐢𝐧 𝐭𝐡𝐞 𝐤𝐞𝐲 𝐭𝐞𝐜𝐡𝐧𝐨𝐥𝐨𝐠𝐢𝐞𝐬 𝐭𝐡𝐚𝐭 𝐰𝐢𝐥𝐥 𝐝𝐞𝐟𝐢𝐧𝐞 𝐭𝐡𝐞 𝐟𝐮𝐭𝐮𝐫𝐞.  Further innovation today is digital, networked, and open. It no longer happens solely in closed R&D labs, but through experimental learning across organizations and ecosystems. This is where we are failing to adapt. 𝐓𝐡𝐞 𝐠𝐨𝐨𝐝 𝐧𝐞𝐰𝐬: the potential is still there. Germany's innovation ecosystem is still strong, especially in efficiency. 💪🏼 𝐆𝐞𝐫𝐦𝐚𝐧𝐲 𝐧𝐞𝐞𝐝𝐬 𝐚 𝐁𝐎𝐋𝐃 𝐬𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐚𝐥 𝐬𝐡𝐢𝐟𝐭: 👉𝐃𝐞𝐞𝐩 𝐓𝐞𝐜𝐡 𝐎𝐟𝐟𝐞𝐧𝐬𝐢𝐯𝐞: Massive investment in R&D and applications for AI, Quantum, and Biotech. 👉 𝐀𝐦𝐛𝐢𝐭𝐢𝐨𝐧 𝐁𝐨𝐨𝐬𝐭: More audacity and risk-taking in corporate boardrooms 👉 𝐑𝐞𝐝 𝐂𝐚𝐫𝐩𝐞𝐭 𝐟𝐨𝐫 𝐬𝐭𝐚𝐫𝐭-𝐮𝐩𝐬: More Venture Capital and a supportive environment for experimentation. 👉 𝐅𝐚𝐬𝐭 𝐓𝐞𝐜𝐡 𝐓𝐫𝐚𝐧𝐬𝐟𝐞𝐫: Radically simplify and standardize the path for university spin-offs. 👉 𝐆𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐚𝐬 𝐄𝐧𝐚𝐛𝐥𝐞𝐫: Public institutions must switch from being bureaucratic brakes to enabling partners. Only then the German economy can shake off the stagnation. ❓Where do you see the biggest barrier to innovation in Germany ❓ ❓Where is the shift already working ❓ For more ideas and insights, check out the DEEP TECH MANIFEST by MÜNCHNER KREIS e.V. Thanks to Thomas Jahn and Sibylle Scharr for the interviews and for bringing this key topic to the forefront. Links in the comments. Peter Leibinger Stefan Schaible Verena Pausder Philipp Baaske Rafael Laguna de la Vera Dietmar Harhoff Monika Schnitzer Thomas Sattelberger Christoph J. Stresing

Last week in Europe, I spent time with leaders across industries comparing notes on where AI transformation is heading.   What struck me wasn’t the excitement around new tools—we’ve moved past that. It was a growing realism about what it will take to deliver value at scale.   A few themes are coming through clearly:   🔹2026 is shaping up as the year of focus. Organizations are moving from “a thousand flowers blooming” to redesigning three to five core processes that really matter. Less hero-led experimentation. More enterprise capability-building.   🔹The hard work is finally getting airtime. Breakthroughs aren’t coming from flashy demos. They’re coming from data readiness, control simplification, operating-model redesign, and serious change management.   🔹The value story is shifting from automation to reinvention. The most advanced companies are seeing their biggest returns not from labor cost takeout, but from reimagining work in ways that simply weren’t possible before. Better audits, stronger insights, higher quality outputs—AI is adding more valuable work than it's removing.   🔹 Human judgment matters more, not less. Across sectors, there’s strong agreement: AI raises the premium on context, expertise, and decision-making. The organizations pulling ahead are treating AI as a team sport—shifting focus from individuals to collaboration.   🔹 Talent models are being pressure-tested. Demand for human talent remains strong. Early-career hiring isn’t disappearing, but development is changing. We’re seeing experimentation with reverse apprenticeships, faster paths to judgment, and more hands-on, in-the-flow learning.   Taken together, this feels like a turning point.   The next chapter won’t be defined by how many pilots we run, but by whether we're willing to modernize the processes, operating models, and career paths designed for a very different era.

The best defense is a good (funding) offense. Investors, governments, and builders are all in on defense tech. In recent weeks, we saw major deals and announcements including Anduril's oversubscribed $2.5B Series G, Anthropic's release of defense-specific models, and Impulse Space's $300M Series C. 🚀 Defense tech is having a breakout year – on track for a record-breaking year with projected investor participation up 31% YoY to nearly 1,000 unique investors. This surge represents the highest level of investor interest ever recorded in the sector. The momentum is particularly striking given broader venture market headwinds, signaling that defense tech has become a must-have allocation for institutional portfolios. 💸 The investor base is diversifying beyond traditional defense-focused funds, with generalist VCs like a16z and 8VC developing specific theses in the sector. These investors bring Silicon Valley playbooks — rapid iteration, software scalability, and platform thinking — to an industry historically dominated by slow-moving defense primes. This cross-pollination is accelerating innovation cycles from years to months in critical areas like autonomous systems manufacturing. 🌏 Geopolitical tensions and the Ukraine conflict have validated the strategic importance of defense tech, driving both government and private capital allocation. Earnings call mentions of "defense" reached an all-time high in Q1 2025, while major tech companies and the hottest AI startups are forming consortiums to compete for DoD contracts. This mainstreaming of defense tech reduces reputational risk for investors and opens institutional capital pools previously unavailable to the sector. In chatting with Justin Fanelli (CTO, Department of Navy), it is clear that the increased investor and builder is fueled by the government's increasingly innovation-forward appetite. "Investors and founders who have backed this sector and mission have moved the needle for national security, even while we've been slow, reluctant buyers. We are now overhauling the way we buy at scale. We have shifted many buyer orgs from program offices to more flexible portfolios. This is one of several ways we're putting far more emphasis on impact and value. Innovation adoption and commercial-first pushes have already made us more adaptive and resilient. We want a wider base of high performers. What's better than competition to serve those who serve all Americans better? Recent AI and raise news shows there's more room to make bigger impacts. If we nail this, I think it's fair to expect impact and investment will continue to grow." Curious about the defense tech markets and companies seeing the most interest? Explore the data and insights for *free* in the comments.

Global R&D Is Rising, But the Landscape Is Shifting — Insight from WIPO’s Latest R&D Analysis The latest Innovation Insight Post from WIPO’s Global Innovation Index team offers a compelling snapshot of where global research and development stands — and where it’s heading. https://lnkd.in/e_pQpNZ2 Here are several key facts that should capture the attention of innovation leaders, policy makers, and business strategists: 1️⃣ Global R&D spending keeps climbing • Total world R&D expenditure reached an estimated USD 2.87 trillion in 2024, up from USD 2.78 trillion in 2023 — nearing the USD 3 trillion threshold in constant 2015 PPP terms. • This represents more than a threefold increase since 2000 in real terms — underlining the long-term upward trajectory in research investment. 2️⃣ The global economy is far more research-intensive than ever • R&D intensity (total R&D as a share of GDP) has risen from 1.48% in 2000 to about 2% in 2024, reflecting deeper integration of innovation into economic activity. 3️⃣ Asia now dominates the R&D map • The Asia region (including Southeast Asia, East Asia, and Oceania) accounts for around 42–45% of global R&D in 2024 — a dramatic rise from about 23% in 2000. • This structural shift underscores how innovation investment is migrating toward faster-growth markets and ecosystems. 4️⃣ Rapid growth among emerging economies • Middle-income economies such as Indonesia and Viet Nam have posted strong R&D growth trajectories in recent years, highlighting increasingly diversified sources of global innovation capital. 5️⃣ A realignment among top R&D spenders • China (approx. USD 786 billion) and the United States (approx. USD 782 billion) now lead global R&D expenditure and are nearly neck-and-neck in scale. • Traditional leaders such as Japan and Germany remain significant, but their relative shares have declined compared with earlier decades. 6️⃣ Middle-income innovators are catching up fast • China’s R&D spend has soared from just USD 40.7 billion in 2000 to USD 785.9 billion in 2024, an almost 20-fold increase. • Other middle-income economies — including Türkiye, India and Brazil — feature among the fastest-growing R&D investors over the past two decades. 7️⃣ R&D intensity varies widely across countries • Israel (6.33% of GDP) and the Republic of Korea (5.32%) stand out as innovation leaders with exceptionally high R&D intensity. • In contrast, many economies — including several middle-income ones — still report R&D intensity below 1% of GDP. 8️⃣ Private sector funding is often dominant • In many leading economies, 70–90% of R&D is financed by the private sector — with Israel, Viet Nam and Ireland among the highest in private R&D share. • In other settings, public investment remains central to building foundational research capacity. These trends are worth tracking closely. Nisha Jalan Elisabeth Nindl

This newsletter explores how Agile has shaped the way teams build artificial intelligence systems. AI development is uncertain, data-driven, and constantly evolving, which makes Agile’s emphasis on iteration, feedback, experimentation, and continuous improvement especially valuable. In this issue, I look at how Agile helps AI teams move beyond rigid planning, deliver value incrementally, surface risks earlier, build stakeholder trust, and support responsible AI practices through collaboration, governance, and ongoing learning.

R&D spending is rising at a pace the world has never seen. But a harder question sits beneath the headline: Is more spending actually creating more innovation? Global R&D has crossed ~$3 trillion in 2024, up from under $1 trillion in 2000. On the surface, this looks like a golden age of innovation. Yet productivity growth across major economies has remained modest. The correlation is weakening. China has scaled R&D at ~13% CAGR over two decades and now spends roughly on par with the U.S. in PPP terms. The U.S., despite absolute leadership in frontier innovation, ranks far lower in growth rate. Meanwhile, countries like Saudi Arabia, Indonesia, and Egypt are rapidly increasing their base, signalling a broader diffusion of research capacity. But scale alone does not explain outcomes. Three structural shifts are redefining the meaning of R&D. First, R&D is no longer evenly distributed. A handful of firms dominate. The top 10 global tech companies now account for a disproportionate share of corporate R&D. In semiconductors, AI, and biotech, the cost of staying relevant has escalated so sharply that only a few players can sustain the cycle. This creates a concentration of innovation, not a democratization of it. Second, the nature of R&D has changed. Earlier cycles focused on incremental improvements and product extensions. Today’s R&D is platform-driven—AI models, semiconductor nodes, quantum systems. These require massive upfront investment with uncertain payback timelines. The lag between spend and outcome is widening. Third, efficiency is diverging. Not all R&D dollars are equal. Some firms convert spend into market-defining products. Others absorb capital without meaningful output. The metric that matters is not R&D intensity, but R&D productivity—how effectively ideas translate into scalable value. This is where the global paradox emerges. We are investing more in innovation than ever before, yet breakthroughs are concentrated, timelines are longer, and returns are uneven. From a strategist’s lens, this leads to a few implications. Innovation is becoming capital-gated. Entry barriers are rising across deep tech sectors. Startups will increasingly depend on ecosystem partnerships rather than standalone R&D bets. Geopolitics will shape innovation flows. Governments are now active participants—through subsidies, export controls, and national missions. R&D is no longer just corporate strategy; it is national strategy. And finally, measurement frameworks must evolve. R&D spend as a percentage of GDP or revenue is no longer sufficient. We need sharper lenses—time-to-commercialization, IP quality, ecosystem leverage, and platform adoption. The next decade will not be defined by who spends the most. It will be defined by who converts knowledge into impact, faster and at scale. Because in this cycle, innovation is not scarce. Execution is. Source references:WIPO Global Innovation Index, UNESCO R&D Visual Capitalist analysis on R&D growth. DC* Dinwins