The RQ50 is the set of 50 most innovative US companies in the market—those spending over $100 million in R&D, whose R&D investment creates the greatest value for their shareholders. From old-guard sectors, including industrials, oil and gas, and defense to toy makers and some of Silicon Valley's elite, the R&D cultures within the RQ50 prove that innovation isn't about spending big, it's about a relentless long-term focus on R&D that optimizes return on innovation to shareholders.
The RQ50 ranks companies based on their demonstrated actual ability to increase revenue from R&D, not the value of projected revenue increases. RQ measures the percentage increase in revenues associated with a 1 percent increase in R&D. What the list reveals is that spending more on R&D does not necessarily generate higher returns.
The proof is in the numbers: The RQ50 index portfolio outperformed the S&P 500 by over 900% during the last 40 years. Recent performance is less impressive, because company RQs are declining. Even still, the RQ50 has beaten the S&P500 over the last 6 years, with a return of 124.2% versus 82.8% for the S&P500.
My goal is to restore companies’ RQs, so they and investors receive higher returns, and the economy enjoys greater growth.
