Worldwide corporate R&D investment increased by 6.9% in 2008, in spite of the economic crisis, according to the 2009 "EU Industrial R&D Investment Scoreboard" published today. With an 8.1% increase, the R&D investment growth of EU companies', defined as companies having headquarters within the EU, is significantly higher than US ones for the second year, at 5.7%, and Japanese ones, at 4.4%.

The European Commission EU Industrial R&D Investment Scoreboard shows that despite the economic crisis, the corporate R&D investment worldwide is still at 6.9%, compared with 9.0% in 2007. EU companies managed to maintain their R&D investment growth barely unchanged at 8.1% from 8.8% in 2007, whereas that of US companies fell from 8.6% in 2007 to 5.7% in 2008. Companies based in emerging economies continued to show the highest R&D growth, led by China with a 40% increase, India (27.3%), Taiwan (25.1%) and Brazil (18.6%). If the impact of the crisis is not yet fully reflected in the corporate R&D investment, it is more visible in other indicators collected by the Scoreboard, such as company operating profits, which dropped by 30.5% for EU companies and by 19.1% for US companies.

The report published last year showed how, for the first time, EU corporate R&D investment growth overtook US. This year, despite of the crisis, the investment in the European Union is higher than in Japan.

Company trends

Two EU companies, Volkswagen and Nokia, are among the top 10 R&D investors; five from the US, including Microsoft, and General Motors, Pfizer; and one from Japan, Toyota, at the top position. In the Top 50 R&D investors are16 EU companies and 18 US companies, two less each than in 2007, while Japan has 13 companies, four more than 2007.

However, EU companies in the top 50 had a higher average R&D intensity (R&D investment as percentage of sales) than non-EU companies, with 7.8% compared to 6.8%.

Sector trends

The R&D growth in the US is dominated by the high R&D intensity sectors, which includes Pharmaceuticals and biotechnology and IT sectors, while R&D growth in the EU is more evenly spread across all sectors.

US companies have reinforced their leading position in the high R&D intensity sector, by increasing their investments by 35% in the last four years against only 13.6% in the EU companies. While the total US high R&D intensity sector is twice the size of the EU one in terms of R&D investment, EU companies in this sector show similar performance than US competitors in terms of R&D and related indicators.

EU companies lead the way in the medium-high and medium-low R&D intensity sectors, such as automobile & parts, electronic and electrical equipment or chemicals.

The pharmaceuticals & biotechnology sector reinforces its position as top R&D investor both worldwide and in the US, accounting respectively for 18.9% and 25.0%. Many pharmaceutical companies showed a strong increase in R&D investment: e.g. Takeda Pharm. (+42.7%), Boehringer Ingelheim (+21.9%), Schering-Plough (+20.6%). However, Merck (US), Johnson & Johnson and Pfizer. decreased their R&D investment between 1 and 2%.

The automobiles & parts sector is the third worldwide, accounting for 17.1%, but the first in EU and Japan, accounting respectively for 25.0% and 27.0%. Despite being the first sector hit by the economic crisis, some automobile companies had double-digit R&D growth in the last year: Volkswagen (+20.4%), Peugeot (+14.4%) and Fiat (+14.1%). Others reduced their R&D investment considerably, e.g. Renault (-9.2%), Daimler (-9.1%), BMW (-8.9%), Ford Motor (-2.7%), and General Motors (-1.2%).

Background

The 2009 EU Industrial R&D Investment Scoreboard provides information on the top 1000 EU companies and 1000 non-EU companies investing in R&D in the last reporting year. It is published annually by the European Commission.