People may complain about Samsung’s lack of innovation, but nobody can fault them for not trying. In a recent study, Samsung was ranked as the number TWO spender in Research and Development (R&D) among all industries worldwide and number ONE spender among IT companies only – not bad at all. In 2013, Samsung spent around $13.4 billion in R&D, which is about 6.4-percent of its total revenue. Samsung has even increased its R&D personnel by 27-percent since 2010, bringing the total to 63,628 employees!
Samsung is continuing to make changes in how they operate within house by adopting an open-innovation platform along with a new in-house R&D system. In the past, almost all decisions were made at headquarters, but with their new changes, innovative ideas are encourage from overseas R&D centers that can directly address the region-specific needs of its customers. Samsung Electronics says that they are going to focus on expenditures in R&D as a type of investment that will help secure future growth.
Samsung also started to expand their R&D facilities as part of this future investment in innovation. They are still committed to their 2012 announcement of a new R&D facility in Finland to tap into the skilled Nokia engineers. Recently, Samsung announced that they would be building a new R&D center in the Silicon Valley with an entire campus taking up 8.5-acres of land. For as large as Samsung is, they are still somewhat an enigma – can you name even ONE executive – unlike Apple and Steve Jobs or Tim Cook, or even Google’s Larry Page or Facebook’s Mark Zuckerberg. They need to get a presence in Silicon Valley where they will be around a great pool of talent to help with their innovation.
The Korean culture of business, with all decisions being made only in Korea, is tough on even their own employees that are working at overseas facilities where it can take weeks to get a decision back, rather than hours or days. Many times unreasonable expectations are put on project managers and then there is a certain amount of arrogance that must be dealt with as well. We have started to see some good results from Samsung’s willingness to move forward with the use of metal in their Galaxy Alpha series and the new Galaxy Note 4 and the innovative Galaxy Note Edge – and hopefully we will see this in their next Galaxy S6 and beyond.
Please hook up with us on our Google+ Page and let us know if you think Samsung is finally headed in the right direction…as always, we would love to hear from you.