According to the recent study « Global Innovation 1000 – Innovation’s New World order » led by three top PwC consultants, 2015 marked a turn in the R&D spending destination new world order.
With more than 94% of the biggest innovative companies investing their R&D budget abroad, the geographical footprint of innovation highlights new regional destinations for R&D spending and pushes aside the previous ranking established by PwC since 2007.
The reasons: reaching the best skills and high potential from the market in terms of sales and growth capacities.
- Asia is now the number one region for corporate R&D spending
Asia supplants North America and Europe benefiting from 35 % of the R&D spending (spending by local companies and R&D spending imported from other regions) against 33 % and 28 % respectively.
This boom is mainly due to the growth of 2 countries: China and India.
In 8 years China increased by 120 % in terms of R&D spending ($55 Billion) and surpassed Japan and Germany. India moved from 7th place to 5th place among all the countries in terms of R&D spending and moved ahead of the United Kingdom and France.
- U.S. : Leading, but losing ground
Favored destination for innovation, the United States remains the first region in terms of R&D spending ($145 billion). However we note that its growth is less significant than that of China. (120% for China against 34% for US).
The biggest gain came from imports from European companies which represent 64% of the US total in R&D spending.
- European Companies spend less at home
Behind Asia and North America in third place regarding worldwide regional R&D spending is Europe, recording an increase of its R&D exports (46 %). On the contrary the domestic spending is decreasing with regards to 2014. (Decline from 32 % to 29 %)
We note a disparity of behavior between Western and Eastern Europe. The experts attribute this reduction in domestic R&D spending to Western Europe.
- Top of R&D Spending: companies and business sectors
The companies surveyed in the « Global on 2015 Innovation 1000 » study, spent $280 Billion in R&D which represents an increase of 5,1 % with regards to 2014.
The 5 companies having made the most R&D spending in 2015 were, in decreasing order: Volkswagen, Samsung, Intel, Microsoft and Rock.
The sector of computing and the electronics is leading the way representing 24.5 % of the spending and is closely followed by the pharmaceutical sector (21.3 %).
Access to the study by clicking here
Source : Revue – Strategy+Business -« Global Innovation 1000 – Innovations’s New World Order » – PWC – by Barry Jaruzelski, Kevin Schwartz and Volker Staack – Winter 2015.