Joint Research Centre (JRC) and Research (DG RTD) Directorates General of the European Commission.
[Reproduced from document JRC 61230, 2010] http://iri.jrc.ec.europa.eu/research/docs/2010/SB2010_final_report.pdf
Short URL: http://wp.me/PNLb5-2eX
Monitoring Industrial Research
- This 2010 “EU Industrial R&D Investment Scoreboard” (the Scoreboard) presents information on the world’s top 1400 companies ranked by their investments in research and development (R&D). It contains data drawn from the latest available companies’ accounts, i.e. the fiscal year 2009 . There are 400 companies based in the EU and 1000 companies based elsewhere.
- In 2009, worldwide corporate R&D investment proved resilient to the global recession. The 1400 Scoreboard companies invested €402.2bn in R&D in 2009, 1.9% less than the previous year. This ends the positive trend of the past four years, when annual growth rates were well above 5%. However, considering how seriously the crisis impacted on companies’ net sales (10.1%) and profits (21.0%) and given that most of the R&D investment decisions reflected in this Scoreboard were taken in late 2008 (at the height of the financial crisis), this figure suggests that R&D remains a top priority for the largest R&D investing companies.
- The top 100 companies accounting for 58% of the total R&D investment.
- Of the 46 companies in the top 100 that increased R&D, 19 did so by more than 10% (7 in the Pharmaceuticals sector). Only 2 out of the 19 came from Europe, compared to 8 from the US and 6 from Japan.
- Japanese car maker Toyota remains in first place as the top R&D investor, followed by the Swiss Pharmaceuticals company, Roche. Volkswagen in fourth position remains the biggest R&D investor in the EU.
- Among the companies most affected by the crisis are those of the Automobiles sector: Toyota and Volkswagen strive to consolidate their R&D investment position, while others, like General Motors and Ford, made significant reductions and dropped out of the top 10. 15 companies reduced R&D, including massive reductions by Ford (32.4%), Renault (26.5%) and General Motors (24.1%). This contrasts with other companies showing a modest reduction of R&D such as Nissan and Toyota, with some even increasing R&D, e.g. Hyundai.
- Companies increasing R&D investment in 2009 included companies showing good sales and profits, such as Huawei Technologies (27.8%) and Apple (25.4%), as well as companies whose profits and sales fell substantially, such as Bayer (8.8%) and General Electric (10.1%).
- The overall R&D figures mask significant differences in individual industrial sectors. R&D investment in the Pharmaceuticals sector continues to rise whereas the Automobiles and IT hardware sectors show a substantial decrease.
- The Alternative Energy sector continued the rapid growth trend seen in the past 3 years, growing in number of companies and size. The Scoreboard now includes 15 companies (9 more than last year) fully focused on clean energy technological development. These companies, 13 based in the EU and 2 based elsewhere, invested more than €500 million in R&D in 2009, representing a considerable increase of 28.7% compared with the previous year.
- R&D patterns differed greatly across regions, with US companies showing a bigger drop than their EU counterparts, and some Asian countries strongly increasing R&D.
- EU companies reduced their R&D investment by 2.6%. This is roughly half of the reduction of their US counterparts (5.1%), despite showing similar drops in sales (around 10%) and a significantly higher drop in profits (13.0% vs 1.4%).
- More remarkable still, is the performance of the Japanese companies, which maintained the level of R&D investment of the previous year, despite large drops in sales (around 10%) and a dramatic drop in profits (88.2%).
- In other areas of the world, companies increased both R&D investment and net sales. China (40.0%), India (27.3%), Hong Kong (14.8%), South Korea (9.1%) and Taiwan (3.1%). Companies based in Switzerland also increased their R&D investment (2.5%).
- China has added 6 companies since last year, Taiwan and South Korea 4 each, Japan 3 and India, Hong Kong and Singapore 2 companies each. However, China has only 21 companies in the Scoreboard compared to 26 for South Korea. By contrast, 27 US companies dropped out of the ranking, although the US remains by far the largest R&D contributor with 504 companies.
- Notwithstanding the crisis, the world’s R&D landscape has maintained its characteristic sector composition, with the US dominating in high R&D intensive sectors and the EU in medium-high ones.
- EU companies contribute 43.5% of total automotive R&D, and 40.3% for chemicals. In these same sectors, Japanese companies contribute 36.3% and 34.4%, respectively. The US contributes 43.2% of Pharmaceuticals, 48.0% of IT hardware and 74.6% of Software & Computer Services.
- If industrial sectors are grouped according to high, medium-high, medium-low and low R&D intensity, it is observed that the medium-high R&D intensive sectors continue to predominate in the EU, accounting for 48%. The most R&D-intensive sectors contribute to 69% of the total R&D for the US, 37.8% for Japan and 34.9% for the EU.
- Large part of the R&D intensity gap between the EU and the US comes from a smaller number of young innovative companies in high R&D-intensity sectors.
- Other dynamic regions are likely to challenge the EU and the US over the medium term.
- Semiconductors, Software and Biotechnology have a role as technology enablers for the whole value chain of other key sectors, namely for ICT-related industries, transport, health, food and environmental sectors. R&D is an important competitiveness factor for these sectors; in 2009 they had the highest R&D intensity in the Scoreboard, Semiconductors (16.8%), Software (14.6%) and Biotechnology (21.2%).
- Most of the overall R&D decrease in the EU group comes from countries with a large share of Automotive R&D, e.g. Germany and France, and IT hardware R&D, e.g. Finland and Sweden.
- German, French and UK companies constitute more than two thirds of the total R&D investment of the EU Scoreboard companies. The R&D investment decreased for French (4.5%) and German (3.2%) companies. Most of the decrease in R&D for German and French companies was due to Automobiles & Parts companies, where R&D investment dropped by 7.4% and 14.1%, respectively. The UK showed only a 0.6% reduction in R&D, partly due to its small automotive sector.
- Spain increased R&D investment (15.4%), despite the downturn (sales dropped by 6.4%).