EU Scoreboard Companies’ R&D Expenditures Continue to Rise

In the 2017 edition of the EU Industrial R&D Investment Scoreboard, which annually tracks R&D spending at the world’s largest companies, data indicated that the world’s 2,500 largest companies from 43 countries increased their fiscal 2016/17 R&D spending 5.8% to total €741.6 billion ($872.5 billion = €0.85 = $1), which reflects approximately 90% of global business-funded R&D. Of this, 567 EU companies made up 23%, 822 US companies accounted for 33%, 365 Japanese companies represented 14%, 376 Chinese companies comprised 15% and the Rest of World firms made up 15%. Last year’s rise in R&D investments marks the sixth consecutive year of increases.

Data in the Scoreboard are indicated in euros, and all foreign currencies were converted based on the exchange rate of the closing date of the report, December 31, 2016. The deviations in exchange rates affected the company rankings, as countries with appreciated currency were ranked higher in respect to other currencies. During the reporting period of the report, the exchange rate of the Euro depreciated 3.3% against the US dollar and 6.2% against the Japanese Yen, but appreciated 17.4% against the British pound.

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Companies from the US and EU had a 7.2% and 7.0% increase in R&D, respectively, which was more than the global average. Although Chinese companies’ R&D grew 18.8%, in comparison to the size of the nation’s economy, its total R&D was smaller than that of the top performing regions.

Although investments in R&D grew modestly, Scoreboard companies in fiscal 2016/17 increased sales only 0.1%. However, operating profits and workforce numbers of Scoreboard companies grew 8.7% and 1.7%, respectively. Capital expenditures dropped 6.2%. Global R&D intensity, which is calculated as total R&D as a percentage of sales, was 4.1%, while capital expenditure intensity and profitability, also computed as a percentage of sales, was 6.7% and 9.5%, respectively.


Top 100 Spenders

The top 100 companies accounted for 53% of total global R&D spending, growing 5.9% in total, with 61 companies having positive R&D growth in 2016/17. Of this figure, 30 companies’ R&D grew in the double digits, with 17 of them also showing double-digit growth in net sales. Thirty of the top 100 companies are based in the EU. In regards to sectors, 25 of the top 100 R&D spenders are in health industries, 19 are in automobiles and other transportation, and 34 are in information and communication technologies industries. The remaining companies are dispersed in other sectors.

Not all companies in the top 100 increased in R&D investments, as 39 companies experienced decreases in R&D spending. Five companies also had operating losses, while 23 companies recorded profitability of 5% or less. Twenty-five companies experienced profitability of over 20%, and 23 of these firms operate in R&D-intensive sectors.


Sector Growth

Automobiles and other transport represented 17% of total R&D, growing 2.7%. Chemicals represented 3% of total R&D, dropping 1.9%, while health industries, which includes biotechnology, health care providers, medical equipment and pharmaceuticals, comprised 22%, a growth of 6.9%.

The ICT (Information and Communications Technology) services sector was the greatest driver of R&D growth, at 11.7%. ICT services, health industries, ICT producers, and automobiles and other transport comprised 75% of total R&D of the 2,500 Scoreboard companies.

Compared to data from last year’s Scoreboard, for a group of selected industries (see table below), the greatest increase in sales and capital expenditures was in the alternative energy sector, which grew 17.5% and 17.0%, respectively. In line with recent trends, the oil and gas sector’s sales and capital expenditure dropped the most, with decreases of 11.3% and 26.0%, respectively.

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Pharmaceuticals and Biotechnology

As a whole, the pharma and biotech sector, which includes 398 companies, increased R&D in fiscal 2016/17 by 7.4% to €154 billion. Fifty-three pharma companies are from the EU and had a combined R&D intensity of 13.7%; 145 of non-EU pharma companies had a total R&D intensity of 13.2%.

Although R&D investments and sales in the biotech sector were significantly less than pharma sales, R&D intensity in biotech soared, with 30 EU companies having R&D intensity of 24.0% and 127 non-EU companies with 26.2%.

Top pharma and biotech companies include AstraZeneca and Roche, and QIAGEN and Gilead Sciences, respectively.



The 122 companies in the chemicals sector, which includes commodity and specialty chemicals, represented 3% of total R&D, with 18% of companies based in the EU and 82% in non-EU countries. R&D in chemicals declined 1.9%. Global net sales for the chemicals sector also declined, falling 2.3%, while capital expenditure fell 9.7%.

Among EU companies, the largest net sales decline was attributed to the chemicals sector, dropping 6.0%. China Petroleum and Chemical had the largest increase in chemicals net sales at 8.0%.

Top companies in the chemicals sector include BASF, DuPont and Dow Chemical.

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