European company investment in R&D is picking up again in Germany, France and the United Kingdom, following a decline due to the 2008-2009 economic slowdown.
The 2012 EU Industrial R&D Investment Scoreboard* published by the European Commission provides financial data on a sample of 1,500 companies which are the world's top investors in research and development. The Scoreboard this year shows that companies continued to increase their R&D investments at a significant pace in 2011 despite facing adverse market conditions and uncertainties due to the persistent effects of the economic crisis. This year’s figures for global increases in R&D (7.6%), sales (7.1%) and profits (9.7%) confirm an upward trend which began in 2010 following the global economic and financial slump of 2008-2009. The recession led to a sharp decline both in R&D and sales in 2009. But despite the ongoing uncertainties, major EU-based firms continue to rely on research and development for their competitive edge, increasing overall R&D investment by 8.9% in 2011, following a 6.1% rise in 2010. This is above the global average, and on a par with US companies, whose spending was up 9% in 2011 compared with 10% the previous year.
US still leads Germany, France and the UK
Companies based in Germany, which account for around one third of the total EU private sector R&D investment, increased their R&D spend by 9.5%, leading the strong investment growth figures among European companies. Firms based in the UK and France, which also account for a large proportion of private research, came next. The UK even showed a higher rate of investment growth than Germany, with a rise of 13.1%, while France posted growth of 7.6%. Nevertheless US-based industrial companies continue to register much better business results than their EU rivals in terms of sales growth - 12.3% compared with 4.9% for EU-based companies - and an overall increase in profits of 12.4% versus 3.5% for EU firms. The R&D Scoreboard shows that the top spending companies based in other countries, with the exception of Japan, are also making considerable efforts in research and development, with an average growth in R&D investment of 11.3%.
Automotive and ICT sectors top the rankings
The sector pumping most money into research and development is the automotive industry, with Japanese car manufacturer Toyota topping the overall R&D spend list and Volkswagen, the only European company in the top 10, ranked third. From an already high base, the automobile and parts sectors have seen rises of over 20% since the last Scoreboard rankings, other top-100 companies such as Delphi (+87.8%) and Aisin Seiki (+20.2%) showing notable rises in R&D spend. As in 2010, EU carmakers BMW (+21.6%) and Renault (+19.4%) topped the list of companies boosting their R&D investment in 2011, with Volkswagen rising from sixth to third place in the growth table. Among the top-100 R&D spenders worldwide, companies in the ICT sector reported the greatest increases in their investments, such as Huawei with 48.4% growth, LG (up 47.8%), Google (plus 37.2%) Apple (+36.3%) and STMicroelectronics, which posted a 34.5% increase in research and development expenditure. Pharmaceutical giants Roche, Pfizer and Merck (ranked in the top 5 in 2010) all see their positions drop but still remain in the top 10 companies worldwide on total R&D spend, the Scoreboard shows.
* The sample comprised 405 companies based in the EU and 1,095 firms based elsewhere. The Scoreboard data were drawn from the latest available company accounts, i.e. fiscal year 2011 for most companies.