Invest in R&D “as much as your soul can take” — but don’t bet the farm

by Mari Katajamäki | October 16, 2025

Long-term value rarely comes from quarterly efficiency drives. It comes from systematic R&D and the ability to stomach uncertainty. At Professio’s CxO Industry 2024, Cargotec’s Chief Strategy Officer Mikael Laine outlined why bold, structured R&D and disciplined risk management must move together — and how to keep the balance.

Growth is built by R&D — fund it deliberately

Companies exist to create value, and growth explains roughly half of long-term value creation in major studies. The practical implication: R&D is a corporate life-insurance policy in global competition and should be financed systematically, not sporadically. Laine’s message was blunt: short-term earnings can tempt cuts, but over the cycle those cuts are expensive.

Cargotec’s own trajectory pairs sustained R&D investment with revenue expansion and a markedly higher market value over the past decade. Causality is never singular, but the correlation is strong.

A three-tier operating model

Laine described a governance model that ties ambition to accountability — and money:

Division level (Horizon 1–2): continuous product development close to customers; typically 1–3% of revenue; decisions sit with line management, while business areas coordinate the portfolio.

Business area / corporate (H2–H3): new technology adoption is centralized enough to avoid duplication and achieve scale; target 10–20% allocation to emerging tech where feasible.

Corporate (transformations): strategy-level shifts — first digitalization, now sustainability — funded centrally (e.g., a €10 m transformation fund), with explicit CEO priority. Without top-management backing, structure won’t save the strategy.

Don’t bet the farm: hold risk and speed in tension

Bold bets create missteps: wrong tech, bad timing, wasted spend. Laine’s answer is a three-point chassis:

Financial visibility: robust reporting and forecasting inside an enterprise risk-management cadence — always know how much is invested, where, and why.
Foresight (10+ years): external networks and scenario work that steer priorities before capital is locked in.
Plan-B discipline: when shocks hit, react fast — and protect R&D last so cumulative learning doesn’t stall.

Case notes: breakthroughs are a by-product of the base

Breakthroughs cannot be scheduled; they emerge from a strong base of product work. In Hiab, systematic platform renewal refreshed an aging portfolio and lifted growth materially. In forestry cranes, moving the operator into the warm truck cab — enabled by available tech — was a category-shifting step, even if adoption in a conservative market takes time. The lesson: keep base development running; breakthroughs ride on its shoulders.

Watch the full keynote here: