US dominance in global R&D investment challenged
A new report from consultant company Cientifica says that Europe and Asia are challenging US dominance in global spending on research and development (R&D). The report 'Global R&D Spend 2002-2004', presents a global survey of the top 100 research and development spenders, with data spanning three years. The data were obtained from annual reports, encompassing corporations with R&D expenditures ranging from 610 to almost 6500 million euro in 2004. The report finds that the world's top 100 spenders together invested over 208 billion euro in 2004, which represents in terms of compound annual growth rate (CAGR) 5.4 per cent, superior to the 4.9 per cent of estimated global GDP growth in 2004. However, the fastest year-on-year growth rates are to be found in the Asia/Pacific region, with a 2002-2004 CAGR of 38 per cent, followed by France with a CAGR of 18 per cent, whilst the US trails in with a CAGR of just 7 per cent. The document presents a detailed analysis by industry sector, country and global region. State owned Chinese corporations are also included, together with a breakdown of the top ten spenders. The geographic split in terms of number of companies comprising the top 100 spenders reveals the leaders to be the US, Japan and Germany. These countries accounted for 41, 24 and 11 of the total number respectively in 2004. Taken together, the EU Member States account for 28 per cent of the companies in the top 100. When the total spend is broken down by geographical area, the US leads for 2004, with 40 per cent of all spend, followed by Japan with 22 per cent, and then Germany with 12 per cent of all spend. The EU countries taken together account for almost 30 per cent of all spend. The report notes that the totals for each country are not the total corporate R&D spend for each respective country, but rather the total spend of those corporations which make the global top 100 list based on annual R&D spend. Out of the fifteen industry sectors studied, only two (chemicals and telecoms) showed a decline, while companies ranging from software to food have all shown significant increases in spending, with the pharmaceutical, health and automotive sectors accounting for almost 50 per cent. Despite a global decline in R&D intensity (corporate R&D spend as a proportion of sales), European companies, with the United Kingdom leading the pack, have now edged ahead of those in the United States. Intensity is 6.6 per cent and 6.5 per cent respectively, followed by Asia Pacific with 5.1 per cent.