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We take a look at data published by the United Nations conference on trade and development (UCTAD) which shows the amount of research and development (R&D) spending by some of the worlds biggest multinational enterprises (MNE's)
Sadly developing countries spend far less on R&D than their more developed peers. |
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Research and development spending of some of the worlds largest firms
So ever wondered how much big companies such as Amazon, Google (via parent Alphabet), Apple and Samsung spend on research and development to develop new phones or devices or how much the large vehicle manufacturing firms such as Toyota, Volkswagen, Ford, Daimler or General motors spends on research and development to develop new products such as self driving vehicles? In their 2019 World Investment Report, UNCTAD supplied the table below which shows the total amount of research and development spending from the Top 20 R&D spenders among the world's 100 biggest Multinational enterprises (MNE).
Amazon is leading the pack, with the group having spent $28.8 billion on research and development during 2018. Their R&D intensity (amount spent on R&D as percentage of total turnover) amounted to 12.4% during 2018. Alphabet (google's parent company) spent $21.4 billion on R&D with a R&D intensity of 15.7%
Below the Top 20 firms ranked based on the amount of R&D spending: (Ranking, Company, Country, Sector, R&D spending in Dollars)
1 Amazon.com, Inc United States, Tech 28.8
2 Alphabet Inc, United States, Tech 21.4
3 Samsung Electronics Co, Ltd Korea, Rep. of , Tech 16.5
4 Huawei Technologies, China, Tech 15.3
5 Microsoft Corp, United States, Tech 14.7
6 Apple Inc, United States Tech, 14.2
7 Intel Corp, United States Tech, 13.5
8 Roche Holding AG, Switzerland, Pharmaceuticals 12.3
9 Johnson & Johnson, United States, Pharmaceuticals 10.8
10 Toyota Motor Corpa, Japan, Automotive 10.0
11 Volkswagen AG, Germany, Automotive 9.6
12 Novartis AG, Switzerland, Pharmaceuticals 9.1
13 Robert Bosch GmbH, Germany, Automotive 8.7
14 Ford Motor Co, United States, Automotive 8.2
15 Pfizer Inc ,United States, Pharmaceuticals 8.0
16 General Motors Co, United States, Automotive 7.8
17 Daimler AG, Germany, Automotive 7.5
18 Honda Motor Co Ltd, Japan, Automotive 7.3
19 Sanofi, France, Pharmaceuticals 6.7
20 Siemens AG, Germany, Industrial 6.4
UNCTAD had the following to say regarding the table above. "In 2018, top global companies invested more than $350 billion in R&D, representing over a third of business-funded R&D worldwide. The top 100 list includes global leaders in the key industries contributing to R&D: ICT, pharmaceuticals and automotive. The top three R&D investors were all from technology and digital industries: Amazon.com (United States) with almost $29 billion of expenditures in 2018, followed by Alphabet (United States) with $21 billion, and Samsung Electronics (Republic of Korea) with $17 billion. Including inthe sample the top 100 MNEs from developing and transition economies produces a list of the top 20 R&D investors that captures a large part of innovation expenditures across the world. The top innovators are concentrated among technology MNEs from the United States and a few emerging economies (mainly the Republic of Korea and China), followed by developed-economy pharmaceutical and automotive firms (table I.8). Among the top MNEs, global international traders, utilities and extractive companies invested the least in R&D.
Top R&D investors from emerging economies were – after Samsung Electronics – Huawei Technologies (China) with $15 billion, and China Mobile (China) with $6 billion.2 Given the differences in size between MNEs, the absolute value of R&D expenditures is not a reliable guide to the importance of R&D in maintaining a company’s competitive edge. For example, the oil company Sinopec (China) invested $1.2 billion in R&D in 2018,
representing only 0.3 per cent of its revenues. Thus, especially for the ranking of MNEs from developing and transition economies, it is more indicative to look at R&D expenditure as a percentage of total revenue (i.e. R&D intensity). This changes the ranking among industries, with pharmaceuticals showing the highest intensities.
In the top 100 MNEs from developing and transition economies, only a few spend more than 5 per cent of sales on R&D. This is due mostly to the industry composition of the list and the prevalence of big industrial or extractive conglomerates (table below). However, even comparing like for like industries, the R&D expenditures by companies from developing countries remain lower. For example, comparing the R&D intensity in the automotive industry shows an average of 1.2 per cent for the two companies in the developing-country list (Hyundai and Tata Motors), compared with 4.7 per cent in the global list (11 companies)"
Below the Top 20 firms ranked based on the amount of R&D spending: (Ranking, Company, Country, Sector, R&D spending in Dollars)
1 Amazon.com, Inc United States, Tech 28.8
2 Alphabet Inc, United States, Tech 21.4
3 Samsung Electronics Co, Ltd Korea, Rep. of , Tech 16.5
4 Huawei Technologies, China, Tech 15.3
5 Microsoft Corp, United States, Tech 14.7
6 Apple Inc, United States Tech, 14.2
7 Intel Corp, United States Tech, 13.5
8 Roche Holding AG, Switzerland, Pharmaceuticals 12.3
9 Johnson & Johnson, United States, Pharmaceuticals 10.8
10 Toyota Motor Corpa, Japan, Automotive 10.0
11 Volkswagen AG, Germany, Automotive 9.6
12 Novartis AG, Switzerland, Pharmaceuticals 9.1
13 Robert Bosch GmbH, Germany, Automotive 8.7
14 Ford Motor Co, United States, Automotive 8.2
15 Pfizer Inc ,United States, Pharmaceuticals 8.0
16 General Motors Co, United States, Automotive 7.8
17 Daimler AG, Germany, Automotive 7.5
18 Honda Motor Co Ltd, Japan, Automotive 7.3
19 Sanofi, France, Pharmaceuticals 6.7
20 Siemens AG, Germany, Industrial 6.4
UNCTAD had the following to say regarding the table above. "In 2018, top global companies invested more than $350 billion in R&D, representing over a third of business-funded R&D worldwide. The top 100 list includes global leaders in the key industries contributing to R&D: ICT, pharmaceuticals and automotive. The top three R&D investors were all from technology and digital industries: Amazon.com (United States) with almost $29 billion of expenditures in 2018, followed by Alphabet (United States) with $21 billion, and Samsung Electronics (Republic of Korea) with $17 billion. Including inthe sample the top 100 MNEs from developing and transition economies produces a list of the top 20 R&D investors that captures a large part of innovation expenditures across the world. The top innovators are concentrated among technology MNEs from the United States and a few emerging economies (mainly the Republic of Korea and China), followed by developed-economy pharmaceutical and automotive firms (table I.8). Among the top MNEs, global international traders, utilities and extractive companies invested the least in R&D.
Top R&D investors from emerging economies were – after Samsung Electronics – Huawei Technologies (China) with $15 billion, and China Mobile (China) with $6 billion.2 Given the differences in size between MNEs, the absolute value of R&D expenditures is not a reliable guide to the importance of R&D in maintaining a company’s competitive edge. For example, the oil company Sinopec (China) invested $1.2 billion in R&D in 2018,
representing only 0.3 per cent of its revenues. Thus, especially for the ranking of MNEs from developing and transition economies, it is more indicative to look at R&D expenditure as a percentage of total revenue (i.e. R&D intensity). This changes the ranking among industries, with pharmaceuticals showing the highest intensities.
In the top 100 MNEs from developing and transition economies, only a few spend more than 5 per cent of sales on R&D. This is due mostly to the industry composition of the list and the prevalence of big industrial or extractive conglomerates (table below). However, even comparing like for like industries, the R&D expenditures by companies from developing countries remain lower. For example, comparing the R&D intensity in the automotive industry shows an average of 1.2 per cent for the two companies in the developing-country list (Hyundai and Tata Motors), compared with 4.7 per cent in the global list (11 companies)"
