R&D spending by the top 2,500 R&D spenders crossed the €1.3 trillion mark in 2022

April 30, 2024

By Davide Bonaglia and Lorena Rivera León (WIPO) and Elisabeth Nindl (JRC – European Commission).

Amidst rapid technological advancements and evolving innovation trends, companies are boosting R&D investments to maintain a competitive edge. The Global Innovation Index (GII) leverages data from the 2023 EU Industrial R&D Investment Scoreboard of the European Commission's Joint Research Centre that tracks the top 2,500 corporate R&D spenders worldwide, accounting for 90% of worldwide business R&D investment.

The findings are clear: since 2003, R&D investments by these top companies have steadily risen, surpassing €1.3 trillion in 2022, marking a 13% increase over the previous year (Figure 1). Despite a more moderate growth compared to 2021 - a historic high of 14%, R&D growth remains higher than pre-pandemic levels, which averaged 7.3% in the period 2015-2019. While pharmaceutical and biotech companies primarily drove the R&D surge in 2020 and 2021, ICT companies, including both hardware and software sectors, became the major contributors in 2022, boosting their R&D spending by more than €75 billion.

Figure 1. R&D expenditure of top 2,500 companies, 2003-2022

U.S. firms maintain their lead among the top 2,500 corporate R&D spenders (Figure 2). In 2022, U.S. companies notably boosted R&D spending, exceeding €500 billion, a 12.7% from the prior year. China holds second place, boasting 679 firms among the top and an R&D investment of €222 billion in 2022 – a 16.4% increase from the previous year, led by industry giants Huawei (€20.9 billion), Tencent (€8.2 billion), and Alibaba (€7.6 billion). The EU follows closely, featuring 367 firms within the top 2,500 and investing €219 billion – a 13.5% increase from the previous year, with German automotive leaders Volkswagen (€18.9 billion), Mercedes-Benz (€8.5 billion), and Robert Bosch (€7.5 billion) at the forefront. Also, Japanese companies, after years of moderate growth, significantly sped up their R&D investments with an increase of over 10.4% compared to the previous year^[1]. Overall, the global trend of declining shares of the EU and Japan continues, while China's is narrowing the gap to the top with its investment surge.

Figure 2. Global R&D investment distribution by economy/region, 2006-2022

The GII 2024, to be released on September 26^th, 2024, will use this data to assess the average R&D spending of the top three companies per country in indicator 2.3.3, Global corporate R&D investors, top 3, mn USD.

A preliminary look at the GII 2024 indicator reveals the U.S. as the frontrunner in corporate R&D, with the top 3 companies averaging €31 billion investments in 2022 (Table 1). China and Germany take the second and third position in terms of the GII indicator, with an average R&D investment of the top 3 of €12.8 and €11.7 billion, respectively.

In terms of R&D intensity, the U.S. remains the leader, with its top three companies displaying an average intensity of 18.54%. Switzerland is close behind, with its leading companies averaging an R&D intensity of 13.91%. The United Kingdom also shows a significant percentage of net sales reinvested in R&D, with its top three companies achieving an average intensity of 13.35%.

Each economy brings its unique strengths to the global innovation landscape, from Switzerland's prowess in pharmaceuticals (with Roche and Novartis) to the Republic of Korea’s electronics focus (with Samsung Electronics and SK Hynix) and the Netherlands’ expertise in ICT hardware (ASML Holding).

Table 1. Top 10 R&D spenders, 2022

Note: R&D intensity defined as R&D investment as a share of net sales.
Source: WIPO, based on the 2023 EU Industrial R&D Investment Scoreboard

Among middle-income economies (Table 2), Indian companies leads in R&D investment with its 22 companies recording a total of €4.7 billion in 2022. Despite a slight reduction in the number of Indian companies – from 25 in 2021, the overall R&D investment grew by 8.1%, highlighting a growing focus on R&D among leading Indian firms. Türkiye and Brazil follow, with R&D expenditures of €765 million and €632 million, respectively. Indonesia, Mexico, Viet Nam, Malaysia, and Argentina also make the list.

Table 2. Top R&D spenders in middle-income economies, 2022

Note: R&D intensity defined as R&D investment as a share of net sales.
Source: WIPO, based on the 2023 EU Industrial R&D Investment Scoreboard

Alphabet and Meta lead the surge in R&D spending, evident in the growth of the top 10 spenders in the 2023 Scoreboard, particularly post-COVID-19 (Figure 3). These companies at the forefront of the R&D investment ranking continue to significantly and consistently boost their R&D activities. With a 36% increase year-on-year, Meta was the largest contributor to R&D growth in 2022 overall. The R&D investment of Alphabet and Meta together correspond to 75% of the total increase in the Software and computer services sector. Microsoft, Apple, and Huawei similarly demonstrate substantial R&D growth over the past years. While Volkswagen, Samsung Electronics, Intel, Roche, and Johnson & Johnson also show consistent R&D investment growth, their additions are less dramatic compared to Alphabet and Meta.

Figure 3. R&D growth of the top 10 spenders, 2008-2022

Three Chinese companies, Nio (automobiles & parts), Sinovac Biotech (pharmaceuticals & biotechnology), and Gotion High-Tech (electronic and electrical equipment), notably improved their ranks compared to the 2022 Scoreboard. Nio’s R&D investment nearly triples, fueled by team expansion and new product development, rising from €587.5 in 2021 to €1.4 billion in 2022, advancing from 316^th to 161^st place. Sinovac Biotech jumps 584 places from 1,066^th to 482^nd with a total R&D of €414.5 million. Gotion High-tech climbs 503 places from 1,113^th to 610^th, with a 2.2-fold increase in R&D investment to €306.6 million.

Among the top 10 fastest-growing companies in middle-income economies, excluding China, three Turkish firms, Ford Otomotiv, Koç, and TUSAŞ (Turkish Aerospace Industries) stand out, alongside two Indian companies, Biocon and Reliance Industries, and three Brazilian enterprises, Braskem, TOTVS, and Embraer. Additionally, one Indonesian company, Gojek, and one Argentinian company, Despegar.com, are among the fastest-growing R&D spenders.

Background

The Global Innovation Index assesses Human Capital and Research through three sub-pillars: Education (2.1), Tertiary Education (2.2) and Research and Development (2.3). Sub pillar 2.3 includes the indicator, Global corporate R&D investors, top 3, mn USD (2.3.3) measuring the average R&D expenditure of the top three global companies.

Data is sourced from The 2023 EU Industrial R&D Investment Scoreboard. Data year: 2023

For a complementary sector-focused analysis, based on a sub-sample of R&D spenders and 2022 estimates produced in June 2023, refer to the GII 2023 Global Innovation Tracker.