But IT companies are barely spending TECHNOLOGY Review`s R&D Scorecard shows that worldwide spending on R&D is picking up, but that the gains are unevenly distributed.

The biggest advances are in the life sciences, which are also among the most research-intensive industries: 2004 R&D spending among biotech companies shot up by an average of 69% over the previous year.

The gain at pharmaceutical companies was a strong 22%. IT companies, however, have barely increased their R&D outlays. Telecoms and hardware companies, on average, spent less than in 2003.

Spending in telecoms remains particularly troubled, with leading companies including Motorola, Ericsson and NTT reporting double-digit decreases. Software remains an exception; paced the sector to a 20% increase in research spending in 2004. CEO " rel=tag>Steve Ballmer alludes to $5 billion in spend this year.

The scorecard ranks companies by spending levels, increases, and R&D as a proportion of sales. Five of the top 10 companies are in life sciences.

But numbers alone don`t tell the whole story. Another indicator of vibrant R&D is willingness to invest in visionary projects that may not pay off for many years if ever. TR spots three "blue sky" research efforts:

Intel`s use of lasers to detect biological molecules with "exquisite sensitivity" could help researchers understand the causes of cancer and other diseases. Lucent Technologies` Bell Labs - which has in the past decade severely curtailed the basic research that once made it such a jewel - is making progress towards the radical concept of quantum computing. And has launched an effort to use supercomputers to model the human brain. These projects provide a heartening counterweight to the common charge that industry is overly fixated on next quarter`s results, the magazine says.

Tags: R&D