Google, Huawei and Microsoft retain their place on the corporate podium most active in the field of R&D (research and development) at world level, but also within the European Union. We see once again that American and Chinese companies are the pillars of R&D.
The Covid-19 has slowed down R&D investments
In his study, the European Commission provides an overview of the global investments made by the 2,500 companies which have spent the most in R&D. First observation: the Covid-19 pandemic slowed down R&D investments around the world in 2020. It’s important to point out, cat it’s a first in 10 years.
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Evolution of R&D investments since 2012. Graph: European Commission.
You have to look in detail to understand the big changes that are happening now. Certain sectors like automotive, aerospace and defense slowed down their investments, while those of tech companies have increased. The Commission specifies that “Despite the decline in their investments in R&D, European companies in the automotive sector still represent the largest share of this sector globally and invest much more than their American and Chinese counterparts”.
European Union companies dedicate 33.6% of their R&D investments in the automotive sector, while the United States devotes only 5.6% and China 9.3%. Conversely, European companies do not devote than 21.5% to investment in tech, against 56.5% for the United States and 45.7% for China. Here is the breakdown of R&D investments within the European Union:
Breakdown of R&D investments by sector. Graphic: European Commission.
In contrast, tech companies took advantage of the pandemic to increase their investments in R&D, with the aim of developing new technological solutions. The proof very recently with IBM which inaugurated its largest R&D center dedicated to AI, in Paris-Saclay, Finland with the installation of the Amazon R&D center for its Scout delivery robot, or with Qualcomm which has recently installed its innovation center dedicated to 5G in Lannion in Brittany.
Only one French company in the top 500
Second observation: out of the 2,500 companies studied, only 401 are European. Unsurprisingly, American companies are the most numerous (779, or 38%), ahead of Chinese companies (597). While Google, Huawei and Microsoft are the three biggest companies in terms of R&D investments, Apple and Facebook are on the verge of catching up.
The top 10 remains the same as last year. In order, we find Alphabet, Huawei, Microsoft, Samsung, Apple, Facebook, Volkswagen, Roche, Intel and Johnson & Johnson. These ten companies have nearly 150 billion euros of R&D investments in 2020. Overall, companies saw their R&D investments decrease by 2.2% in 2020.
Evolution of investments between 2019 and 2020, depending on the regions of the world. Graphic: European Commission.
Only healthcare and tech companies have seen their investments increase significantly. The total amount of R&D investments worldwide in 2020 will reach 908.9 billion euros. A single French company entered the top 500 this year. Faurecia is an automotive supplier that manufactures seats all over the world with its 266 factories. SNCF, formerly 371st in the ranking, is down 146 places.