The 2017 Global
Innovation 1000 study

Investigating trends at the world’s 1000 largest corporate R&D spenders.

Will Stronger Borders Weaken Innovation?

Like it or not, economic nationalism – as expressed in the rhetoric of some political leaders – is a growing global phenomenon to be reckoned with. Multinational companies are concerned that it will translate into – and in some cases already has translated into - policies with the potential to disrupt their businesses. In particular, they are worried about the effect on their global research and development (R&D) networks.

In the latest Strategy& Global Innovation 1,000 study a majority of respondents said a continued trend toward economic nationalism would have a significant or moderate effect on their R&D operations.

The phenomenon is already having an effect on companies’ ability to recruit and attract into certain countries key research and development talent. In the UK, there is clear evidence that the trend is starting to make it harder for some companies to attract R&D talent from overseas.

The study reveals that there has been a drop in applications from international students for science and engineering programmes (both undergraduate and graduate degree level) in the UK.

According to our survey, the UK is viewed as the second most vulnerable country after the United States, and our respondents expressed concerns that weaker R&D programs in the UK could have a ripple effect across the region. Europe as a whole might become weaker compared to Asia and the Americas. Our 2015 analysis of global innovation flows revealed that between 2007 and 2015, R&D spending in Europe had fallen from first place among regions to third, after Asia and the Americas.

Key findings

  • Economic nationalism
  • Mapping vulnerability
  • Global innovation model
  • Global Innovation 1000

52% of survey respondents said economic nationalism will have a moderate or significant impact on R&D.

Survey reveals the UK is one of the top 3 countries at risk if there is a move towards #economicnationalism.

Today’s integrated and interdependent networks will most likely be replaced with autonomous R&D nodes.

R&D spending among the world’s 1000 largest corporate R&D spenders increased 3.2% in 2017 to £523.6 billion.

The 2017 Global Innovation 1000 study

The Global Innovation 1000 study analyses spending at the world's 1000 largest publicly listed corporate R&D spenders. The chart below lists the Top 20 largest corporate R&D spenders headquartered in the UK.

 

Top R&D spenders in the UK

2017 Rank
in Britain
2016 Rank
in Britain
2017 Rank
in the Global
Innovation
1000
Company Industry 2017
R&D Expenditures
(in GBP Billions)
2017
Revenue
(in GBP Billions)
2017
R&D Intensity
1 1 21 AstraZeneca PLC Healthcare 4.77 18.63 25.6%
2 2 35 GlaxoSmithKline plc Healthcare 3.63 27.89 13.0%
3 3 44 Fiat Chrysler Automobiles N.V. Auto 2.80 94.92 2.9%
4 5 121 Delphi Automotive PLC Auto 0.97 13.49 7.2%
5 4 124 Rolls-Royce Holdings plc Aerospace and Defense 0.92 14.96 6.1%
6 8 167 CNH Industrial N.V. Industrials 0.70 19.17 3.6%
7 7 182 BT Group plc Telecom 0.64 24.06 2.7%
8 NEWN/A 288 Travelport Worldwide Limited Software and Internet 0.35 1.90 18.5%
9 10 304 BP p.l.c. Chemicals and Energy 0.32 147.93 0.2%
10 12 432 Micro Focus International plc Software and Internet 0.19 0.85 22.4%
11 13 439 BAE Systems plc Aerospace and Defense 0.21 17.79 1.2%
12 17 457 Dialog Semiconductor Plc Computing and Electronics 0.20 0.97 20.2%
13 11 466 Johnson Matthey Plc Chemicals and Energy 0.19 12.03 1.6%
14 18 480 Smith & Nephew plc Healthcare 0.19 3.78 4.9%
15 14 481 GKN plc Auto 0.19 8.82 2.1%
16 NEWN/A 514 Atlassian Corporation Plc Software and Internet 0.16 0.34 45.6%
17 19 568 The Sage Group plc Software and Internet 0.14 1.57 92%
18 20 577 Reckitt Benckiser Group plc Consumer 0.15 9.89 1.5%
19 15 590 British American Tobacco p.l.c. Consumer 0.14 14.75 1.0%
20 NEWN/A 638 Cobham plc Aerospace and Defense 0.13 0.13 6.7%

Source: Bloomberg data, Capital IQ data, Strategy& 2017 Global Innovation 1000 Study
Note: All figures are in US$ Billions

The 2017 Global Innovation 1000 study

The Global Innovation 1000 study analyses spending at the world's 1000 largest publicly listed corporate R&D spenders. The interactive data tool below lists the Top 25 largest corporate R&D spenders from the years 2011-2017 worldwide. You can use the tool to filter by year, company name, country, and industry group to view R&D expenditures, Revenue, and R&D intensity (R&D expenditure as a percentage of Revenue). In order to see the complete list of Top 1000 corporate R&D spenders from the years 2011-2017 see the "Download the Data" section. Click here for the methodology.

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In order to receive the complete raw data file of the Top 1000 R&D spenders from 2011-2017 you will need to complete this request form. The raw data file will be sent to you from “annie.phan@pwc.com”. Please check your junk mail in case you do not see it in your main inbox folder. If you have not received it, please contact us at annie.phan@pwc.com.

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Strategy&’s 2017 Global Innovation 1000 study Methodology

As it has in each of the past 12 editions of the Global Innovation 1000, this year Strategy&, PwC’s strategy consulting business, identified the 1,000 public companies around the world that spent the most on R&D during the last fiscal year, as of June 30, 2017. To be included, companies had to make their R&D spending numbers public. Subsidiaries that were more than 50 percent owned by a single corporate parent during the period were excluded if their financial results were included in the parent company’s financials. The Global Innovation 1000 companies collectively account for 40 percent of the world’s R&D spending, from all sources, including corporate and government sources.

In 2013, Strategy& made some adjustments to the data collection process in order to gain a more accurate and complete picture of innovation spending. In prior years, both capitalized and amortized R&D expenditures were excluded. Starting in 2013, we included the most recent fiscal year’s amortization of capitalized R&D expenditures for relevant companies in calculating the total R&D investment, while continuing to exclude any non- amortized capitalized costs. We have now applied this methodology to all previous years’ data; as a result, historical data referenced in the studies from 2014 onward will not always align with previously published figures for the 2005 through 2012 studies.

For each of the top 1,000 companies, we obtained from Bloomberg and Capital IQ the key financial metrics for 2012 through 2017, including sales, gross profit, operating profit, net profit, historical R&D expenditures, and market capitalization. All sales and R&D expenditure figures in foreign currencies were converted into U.S. dollars according to an average of the exchange rate over the relevant period; for data on share prices, we used the exchange rate on the last day of the period.

All companies were coded into one of nine industry sectors (or “other”) according to Capital IQ’s industry designations, and into one of five regional designations, as determined by their reported headquarters locations. To enable meaningful comparisons across industries, the R&D spending levels and financial performance metrics of each company were indexed against the average values in its own industry.

Finally, to understand the ways in which global R&D is and will be conducted at companies across multiple industries, Strategy& conducted an online survey of 562 innovation leaders around the world. The companies participating represented more than US$100 billion in R&D spending, or 14.4 percent of this year’s total Global Innovation 1000 R&D spending, all nine of the industry sectors, and all five geographic regions.

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