R&D spending can be a good sign for investors to monitor

— -- Q: Which companies spent the most money on research and development last year?

A: Innovation. New products. New markets. These developments will likely create growth and jobs, amid a slow growing economy.

Some innovation springs from little initial investment. Facebook, for instance, was born in a dorm room.

Yet, for most companies, new products, technology, methods and systems spring from investment. Companies typically reserve some of their annual profit so they can research and develop new ideas, which could provide the inspiration for blockbuster products of the future.

It's exactly this type of investment that companies will be tapping now that they've reached the end of the savings they can get by just slashing costs.

Investors, who are looking for companies that might have the next big thing sitting in their labs, might take a look at research and development, or R&D spending. This number disclosed by companies reveals how much is being spent on finding the next big thing.

The biggest spenders (in billions) on R&D over the past 12 months were:

There are risks to R&D spending. Some companies that pour money into coming up with new products, or refining their current ones, may come up empty. And in those cases, investors may have preferred to have the cash.

However, only the companies that continue to encourage and spark their reinvention will survive over the long term.

Matt Krantz is a financial markets reporter at USA TODAY and author of Investing Online for Dummies and Fundamental Analysis for Dummies. He answers a different reader question every weekday in his Ask Matt column at money.usatoday.com. To submit a question, e-mail Matt at mkrantz@usatoday.com. Follow Matt on Twitter at: twitter.com/mattkrantz