R&D spending at a record high: Amazon leads Alphabet, tech companies dominate
Tuesday, October 31, 2017/
Research and development spending across the world’s 1000 largest publicly listed corporate spenders has topped $US700 billion ($908 billion) in annual investment for the first time, according to a new study undertaken by PricewaterhouseCoopers’ global consulting arm Strategy&.
Strategy&’s 2017 Global Innovation 1000 study found total R&D spending increased 3.2% over the past year, with Amazon the world’s largest spender at $US16.1 billion (up from $US12.5 billion), ahead of Alphabet at $US13.9 billion (up from $US12.3 billion).
Intel Corporation and Samsung Electronics were ranked in third and fourth place, respectively; both recorded $US12.7 billion in R&D spending, up from $US12.1 billion and $US12 billion, respectively. Rounding out the top five was Volkswagen at $US12.1 billion (down from $US12.5 billion).
The top three industry sectors were computing and electronics, healthcare and automotive, representing 61.3% of global R&D spending.
Four Australian companies were included on the list: Telstra, with $US700 million in R&D spending; CSL Limited with $US600 million; Aristocrat Leisure with US$200 million; and Cochlear with $US100 million.
The study also included a global survey of R&D executives, which placed Alphabet ahead of Apple as the most innovative company, with Amazon, Tesla and Microsoft rounding out the top five and Alibaba, ranked 10th, becoming the first Chinese company to make the top 10 list.
The survey of 562 executive participants also revealed concerns about economic nationalism, with 52% of respondents saying a general move toward economic nationalism will have a moderate or significant impact on their companies’ R&D efforts.
Barry Jaruzelski, principal at PwC US for Strategy&, said in a statement it is “a year of highs and lows for R&D” amid the record investment levels and “next to unprecedented drops in alignment between innovation and business strategies”.
“There’s no doubt that uncertainty is causing concern for medium and long-term plans, irrespective of whether policy realities actually follow political rhetoric,” he said.
“Although the goals and levels of investment in corporate innovation will likely not change if economic nationalism continues to develop, the global innovation model would need to evolve.
“At many companies, what is now a nimble, interdependent network may become a group of more autonomous hubs, hiring specialist technical talent in local regional markets and opening future R&D centres in regional markets. It could mean companies losing efficiency and taking on higher costs if it is not managed effectively.”