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American Exceptionalism: R&D Investment

• Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner

Despite President Trumps bests efforts, spending on R&D (research and development) is the real power behind American exceptionalism and it is not fading anytime soon.

American businesses continue to outspend everyone on R&D and this is the reason why EPS (earning per share) are significantly higher for American businesses compared to the rest of the World.

Click for charts.

Important to note that the Chinese are also being smart by spending big on R&D.

The reason is simple, the more money businesses spend on researching new technologies, testing ideas and developing prototypes the more they will keep innovating and improving existing products, services, processes which creates sustained wealth.

This is also the reason why PMs (Portfolio Managers) who invest in overseas businesses have a bias to buy American businesses, they want a piece of this EPS growth.

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