According to several recent articles, corporate America is turning its back on science. Are the days of Bell Labs, Xerox PARC, and major discoveries by chemical giants like Dow and DuPont really gone? Research by Duke University’s FUQUA School of Business seems to indicate that research really is on the decline, finding that 6.1% of U.S. companies published new scientific research in 2007, down from 17.7% in 1980. Of course, those numbers can be misleading.
Core Informatics knows that not all large firms are cutting out their research budgets. In fact, some are increasing R&D year after year. From the United States to China to Germany, many established brands are pouring money into research at unprecedented rates. Here are a few of the top research and development giants in today’s market.
1. Volkswagen (Germany) – $13.5 Billion
For three years running, VW has topped the list of research and development spending, not just in the automotive industry, but across all markets. VW has been spending on technology like hybrid vehicles, batteries, aerodynamics, and fuel efficiency. Hopefully, the emissions scandal setback won’t have a huge impact on Volkswagen’s R&D spending, which accounts for 5.2% of its revenue.
2. Samsung (South Korea) – $13.4 Billion
Samsung has been a thorn in the side of Apple for a long time, perhaps because it invests 3-fold more in R&D than the Cupertino Company. What makes Samsung unique is how it breaks down its R&D. The business unit has a 1-2 year outlook, the research units have a 3-5 year outlook, and the Samsung Advanced Institute of Technology focuses on long-term projects and basic research that serves as the underpinnings of future technology.
3. Intel (United States) – $10.6 Billion
Intel spends upwards of 20.1% of its revenue on research, spending that has allowed the company to deliver on the promises of co-founder Gordon Moore. Thanks to Intel, computing power at a given price point really has doubled every two years. Unfortunately, the expense of pursuing Moore’s law has increased at a similarly rapid rate due to the fact that the processes for etching silicon wafers have increased in complexity. Even worse, Intel is running up against the physical limitations of silicon with no alternative on the horizon.
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4. Microsoft (United States) – $10.4 Billion
Despite a strategy of buying fledgling business with good ideas, Microsoft still finds it prudent to invest 13.4% of its revenue into R&D. More than 1,000 doctoral-level researchers roam through the halls of Microsoft research centers working on everything from the Xbox One to holographic goggles and surface devices.
5. Roche (Switzerland) – $10 Billion
Roche is a leader in the health care industry and spends fully 19% of its revenue on R&D. The vast majority of this money is invested in pharmaceuticals rather than diagnostics, with oncology accounting for 50% of total R&D expenditures. Roche spends more on research than any other pharmaceutical giant.
6. Novartis (Switzerland) – $9.9 Billion
Close on the heels of Roche, Swiss firm Novartis spends roughly 16.8% of its revenue on research and has nearly 140 drugs in active development. The company has had three major discoveries in recent years including cancer medications, autoimmune treatments, and heart failure drugs.
7. Toyota (Japan) – $9.1 Billion
Until VW ramped up its spending and R&D, Toyota was the world’s largest auto manufacturer. The Japanese company invests just 3.5% of its revenue into R&D, but takes a more focused approach than VW. For instance, Toyota has invested heavily in fuel-cell technology.
8. Johnson & Johnson (United States) – $8.2 Billion
Johnson & Johnson invests 11.5% of its revenue into R&D. Between 2013 and 2017, the company has plans to release 10 new drugs as well as 25 extensions to existing lines. Between 2009 and 2013, J&J released 14 new drugs.
9. Google (United States) – $8 Billion
Google spends more than 13% of its revenue on research, pursuing projects like self-driving cars, wearable computers, and high-speed internet infrastructure. The company is currently the leader in self-driving technology, a result of early entry into the segment as well as heavy investment in R&D.
10. Merck (United States) – $7.5 Billion
Merck, another pharmaceutical giant, has invested heavily in research into oncology, antibiotics, vaccines, and diabetes research. The company has shifted a great deal of its R&D focus to immune-oncology drugs, which treat cancer by activating the body’s immune system.
Up or Down
Despite declines in research and development from the federal government, there are still a number of U.S. and foreign firms investing heavily in both basic and applied science. Not making the top 10 list, but still investing heavily in R&D, are firms like Daimler, Pfizer, Amazon, Ford, IBM, Cisco, and host of pharmaceutical companies.
Investing in Innovation: The Research and Development Giants of Today