1 The 2013 EU Industrial R&d Scoreboard 1-third draft 28.10.2013-Acknowledgements The 2013 EU Industrial R&d Investment Scoreboard has been published within the context of the Industrial Research Monitoring
Publications Office of the European union European union, 2013 Reproduction is authorised provided the source is acknowledged 3 The 2013 EU Industrial R&d Scoreboard 3 The 2013 EU Industrial R&d Investment SCOREBOARD
Health & biotechnology 2005-13 6. Company foreign direct investments Annexes: A1-Background information A2-Methodological notes A3-Composition of the top 1000 EU sample A4-Access to the full dataset The 2013 EU Industrial R&d Investment
Scoreboard 5 Summary The 2013"EU Industrial R&d Investment Scoreboard"(the Scoreboard) contains economic and financial data for the world's top 2000 companies ranked by their investments in research and development (R&d.
The sample contains 527 companies based in the EU and 1473 companies based elsewhere. The Scoreboard data are drawn from the latest available companies'accounts,
Key messages Trends observed show a significant variation in R&d investment and economic results across industries and sectors.
A general remarkable resilience of R&d investment growth from top world R&d investors, in a period of economic uncertainty.
The 527 EU companies featuring among the top world 2000 R&d investors in 2012 increased their investment in R&d by 6. 3,
An analysis of foreign direct investments (FDI) by the companies in the world R&d ranking shows that the EU plays, together with the US, a major role in the international investment scenario, both
6 The 2013 EU Industrial R&d Investment Scoreboard Top world R&d investors continued to increase their investment efforts in research and development significantly (6. 2%)in 2012.
This happened in a global context marked by a general slow down of net sales growth (4. 2%vs. 9. 9%in 2011) and a decline in operating profits(-10.1%).
Scoreboard companies increased their R&d investments by an average 6. 2%per year (2010-2012). This resilience of companies'R&d investments during a period of economic uncertainty reflects the strategic importance that companies attach to such investment.
Figure S1 below shows the longerterm R&d trends for a subset of Scoreboard companies with available data for the past nine years.
One-year R&d investment and net sales growth in the Scoreboard. -12%-10%-8%-6%-4%-2%0%2%4%6%8%10%12%2005 2006 2007 2008 2009 2010 2011
2012 nominal growth R&d investment net sales Note: For 1496 out of the top world 2000 companies in the Scoreboard with data for the whole period.
The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. The 2013 EU Industrial R&d Investment Scoreboard 7 The 527 EU companies featuring among the top world 2000 R&d investors in 2012 are good exponents of sustained R&d
focus in a challenging environment. Their R&d growth rate of 6. 3%in 2012 is above the 4. 3%growth rate of net sales,
in a context of sharp profit decreases(-18.4%).%)This R&d growth rate is lower than that of their US counterparts (8. 2),
%which experienced a stronger slow down of net sales (2. 9%).Following a much slower recovery after the crisis,
in 2012 top Japanese R&d investors showed some signs of recovery in net sales and profits,
One-year R&d investment and net sales growth by EU companies. -15%-10%-5%0%5%10%15%20%2005 2006 2007 2008 2009 2010 2011 2012 nominal growth R&d investment
net sales Note: For 334 out of the top EU 527 companies in the Scoreboard with data for the whole period.
The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. 8 The 2013 EU Industrial R&d Investment Scoreboard Figure S3.
One-year R&d investment and net sales growth by US companies. -15%-10%-5%0%5%10%15%20%2005 2006 2007 2008 2009 2010 2011 2012 nominal growth R&d investment
net sales Note: For 547 out of the top US 658 companies in the Scoreboard with data for the whole period.
The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. Figure S4. One-year R&d investment and net sales growth by Japanese companies.
-15%-10%-5%0%5%10%15%20%2005 2006 2007 2008 2009 2010 2011 2012 nominal growth R&d investment
net sales Note: For 324 out of the top Japanese 353 companies in the Scoreboard with data for the whole period.
The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. The 2013 EU Industrial R&d Investment Scoreboard 9 For the first time since 2004, a company based in the EU leads the world R&d ranking:
The German carmaker Volkswagen, with €9. 5bn invested in R&d. Samsung Electronics from South korea jumps to the second place.
Despite lagging behind the US in the volume of R&d investments and in the number of companies, EU-based Scoreboard companies in the Software and Computer Services sector show very strong performance:
show very high increases in R&d investment and sales (14.2%and 11.3%respectively). The R&d growth rates of Volkswagen (32.1%),BMW (17.2%)and Robert Bosch (17%)determine a large portion of German and EU overall positive numbers.
10 The 2013 EU Industrial R&d Investment Scoreboard Trends observed in the pharmaceutical and biotechnology subsectors illustrate well the reinforcement of the US specialisation towards high-tech intensive sectors.
the trend over the last ten years shows that the EU-US R&d investment gap in this sector is maintained (see figure S6).
R&d investment of EU and US companies by sector group. 0 20 40 60 80 100 120 140 160 180 200 EU US
2008 2009 2010 2011 2012 R&d investment (Euro billion) Health ICT producers ICT services other high R&d intensity Automobiles & parts
The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. The 2013 EU Industrial R&d Investment Scoreboard 11 An analysis of foreign direct investments (FDI) by the companies in the world R&d ranking shows that the EU attracted 22%of FDI
projects on R&d from the set of non-EU companies. The EU, together with the US, plays a major role in the international investment scenario, both as a source and destination of knowledge-intensive FDIS.
From 2003 to 2012, the EU attracted 22%of FDI projects on R&d from the set of non-EU companies
The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. Note: The relative size has been calculated as the ratio of sector R&d expenditures in EU over US considering the 136 companies with R&d data for the whole period. 12 The 2013 EU Industrial R&d Investment
Scoreboard Figure S7. Inflows of FDIS in R&d by main world regions 2003-2012 Data:
The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. The 2013 EU Industrial R&d Investment Scoreboard 13 Introduction In 2013, we continued implementing changes in the EU Industrial R&d Investment Scoreboard (the Scoreboard) 2 aiming to enhance its capacity to monitor
and analyse worldwide trends in industrial R&d. For background information on the Scoreboard please see Annex 1. The scope of the Scoreboard has improved progressively,
the total R&d investment of companies included in the Scoreboard is equivalent to more than 90%of the total expenditure on R&d by businesses worldwide3.
The main indicators, namely R&d investment, net sales, capital expenditures, operating profits and number of employees are collected following the same methodologies
which only accounts to end 2011 were available. 2 The EU Industrial R&d Investment Scoreboard is published annually by the European commission (JRC-IPTS/DG RTD) as part of its Industrial Research and Innovation Monitoring
14 The 2013 EU Industrial R&d Investment Scoreboard This report concentrates on the analysis of the world's top 2000 companies that all invested more than €22. 6 million in R&d in 2012.
these all have R&d investments exceeding €5. 2 million. The characteristics of the sample of 2000 companies used for most of the analysis are summarised in Table 1. The sector
and country composition of the EU 1000 sample is found in Annex 3. This edition shows that companies continued to increase R&d investments in 2012 at a significant pace, higher than the growth rate of revenues.
It provides an overview of the main indicators for the top 2000 companies ranked by level of R&d investment
Finally, chapter 6 presents an analysis based on data about foreign direct investments (FDIS) made by the Scoreboard companies.
The methodological approach of the Scoreboard, its scope and the limitations are The 2013 EU Industrial R&d Investment Scoreboard 15 described in Annex 2
and the listing of companies ranked by their level of R&d investment is provided in Annex 3. The complete data set is freely accessible online at:
and country. 16 The 2013 EU Industrial R&d Investment Scoreboard Table 1. Profile of the 2013 Scoreboard. 2000 companies with R&d investment above €22. 6 million
Software & Computer Services 37; Automobiles & Parts 36; Technology Hardware & Equipment 29; Chemicals 24;
Health care Equipment & Services 20; Aerospace & Defence 18. The top 5 sectors account for 43.8%of the 527.1473 companies based in non-EU countries Companies by country US 658;
Software & Computer Services 151; Electronic & Electrical Equipment 139; Industrial Engineering 116; Chemicals 94;
Health care Equipment & Services 63; General Industrials 54; Construction & Materials 39. The top 5 sectors account for 56.1%of the 1473.
The 2013 EU Industrial R&d Investment Scoreboard. European commission, JRC/DG RTD. The 2013 EU Industrial R&d Investment Scoreboard 17 Box 1. Methodological caveats Users of Scoreboard data should take into account the methodological limitations summarised here,
especially when performing comparative analyses (full description of methodology is found in Annex 2): A typical problem arises
companies'consolidated accounts have to include the benefits and/or losses due to the appreciation and/or depreciation of their investments abroad.
For example, this year the R&d growth rate of companies based in the Euro area with R&d investments in Japan is understated partly because the'losses'of their overseas investments due to the appreciation of the Euro against the Japanese yen (from ¥100. 6
the R&d growth rate of Japanese companies is overstated partly due to the'benefits'of their investments in the Euro area.
consequently the approach taken in the Scoreboard is to attribute each company's total R&d investment to the country in which the company has registered its office.
which may have a significant impact on companies'investment decisions, and the initial adoption or stricter application of the International Financial Reporting Standards (IFRS) 5. 5 Since 2005, the European union requires all listed companies in the EU to prepare their consolidated financial statements according to IFRS (see:
) 18 The 2013 EU Industrial R&d Investment Scoreboard The 2013 EU Industrial R&d Investment Scoreboard 19 1. Worldwide trends in corporate R&d This chapter
This edition shows that companies continued to increase R&d investments in 2012 at a significant pace and well above the growth rate of revenues.
Trends observed show a significant variation of R&d investment and economic results across industries and sectors and important differences with respect to the previous year.
The 527 EU companies increased R&d investment and net sales by the significant figures of 6. 3%and 4. 3%respectively.
The largest increases in R&d investment in this group were reported by companies based in China (12.2),
this year's edition of the Scoreboard still shows a significant rise in worldwide R&d investment.
please see methodological limitations in Annex 2. 20 The 2013 EU Industrial R&d Investment Scoreboard following the increase of 6. 1%in the year before.
Company results in terms of operating profits were mixed, 82%of the companies made profits and average profitability was 9. 2,
%however the remaining companies (18%)presented strong losses. Company investment in fixed capital continued to grow at a significant pace.
It increased by 9. 6%compared with the previous year's increase of 12.7%.%Capital expenditure as a percentage of net sales increased slightly from 6. 6%in 2011 to 7. 1%in 2012.7 Compound annual growth rate. 8 Fixed capital investment Table 1. 1 Overall
performance of the 2000 companies in the 2013 Scoreboard. Factor World-2000 R&d investment, € bn 538.8 One-year change,%6. 2 CAGR7 3yr,%6. 4 Net sales, € bn 16845.8
One-year change,%4. 2 CAGR 3yr,%8. 5 R&d intensity,%3. 2 Operating profits, € bn 1549.3 One-year change,%-10.1
Profitability,%9. 2 Capex8, € bn 1109.1 Capex/net sales%%7. 1 One-year change,%9. 6 Number of employees, million One-year change,%48.471 1. 5 Note:
The 2013 EU Industrial R&d Investment Scoreboard. European commission, JRC/DG RTD. The 2013 EU Industrial R&d Investment Scoreboard 21 1. 2 R&d trends by world region This section analyses the overall R&d and economic performance of the Scoreboard companies
according to the location of their registered offices in the main world regions. The 2000 companies are grouped into four main sets:
The R&d investment and net sales for the 527 EU companies continued to grow at significant pace in 2012, at 6. 3%and 4. 3%respectively (slightly above the world's average of 6. 2%and 4. 2%respectively.
The group of US companies increased R&d investment significantly above the world's average, at 8. 2%but net sales only grew by 2. 9%compared with a strong increase in 2011.
increasing R&d investments and net sales only by 0. 4%and 3. 3%respectively. Companies based outside of the EU,
The largest increase in R&d investment was reported by the 93 companies based in China (12.2),
Compared with last year's Scoreboard (1500 top R&d investors), the EU companies'share of total R&d investment rose by 1. 2 (from 28.3%to 29.5%).
The average R&d intensity of the EU, US and OC companies increased due to a higher growth of R&d investments compared with the growth rate of net sales,
Companies based in the EU recovered substantial levels of investment (9. 8%growth) 22 The 2013 EU Industrial R&d Investment Scoreboard compared with a slight decrease in the previous year.
whereas that of companies from the OC group increased at a more modest rate (5. 7%).Companies in three of the four regions decreased profits in 2012 with Japanese companies showing a 4. 2%increase
As a consequence of this, the profitability (operating profits as percentage of net sales) remained level for Japan,
but decreased a lot for the EU (the effect of a low growth rate of net sales can be offset by a lower growth rate of profits).
In the case of the US group of companies, the drop in profits partially reflects the major losses of General motors,
and technology hardware whereas the EU and Japan are stronger in medium R&d intensity sectors like the automotive sector (see chapter 4). Figure 1. 1 R&d investment by the top 2000
The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. The 2013 EU Industrial R&d Investment Scoreboard 23 9 Operating profits as percentage of sales.
Table 1. 2 Overall performance of the 2000 companies in the 2013 Scoreboard. Factor EU USA Japan Other countries No. of companies 527 658 353 462 R&d in 2012, € bn 158.0 189.4 102.7 89.4 World
. 6 8. 4 3. 0 13.0 R&d intensity,%2. 6 4. 9 3. 5 2. 2 Operating Profit, € bn
The 2013 EU Industrial R&d Investment Scoreboard. European commission, JRC/DG RTD. 24 The 2013 EU Industrial R&d Investment Scoreboard 1. 2. 1 Long-term performance of companies by world region The annual
growth rates of R&d investment and net sales and the profitability of companies based in the EU, the US and Japan is provided respectively in figures 1. 2, 1. 3 and 1. 4 for the period 2004-2012.
These figures are based on our history database comprising R&d and economic indicators over the whole 2004-2012 period for 1017 companies (EU 248, US 358 and Japan 241.
The 2013 EU Industrial R&d Investment Scoreboard. European commission, JRC/DG RTD. The 2013 EU Industrial R&d Investment Scoreboard 25 Figure 1. 2. One-year R&d investment and net sales growth and profitability by the EU companies.
-15%-10%-5%0%5%10%15%20%2005 2006 2007 2008 2009 2010 2011 2012 R&d investment net sales profitability Note:
for 388 EU out of the 2000 companies with R&d and net sales data for the whole period Source:
The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. Figure 1. 3. One-year R&d investment and net sales growth and profitability by the US companies.
-15%-10%-5%0%5%10%15%20%2005 2006 2007 2008 2009 2010 2011 2012 R&d investment net sales profitability Note:
for 547 US out of the 2000 companies with R&d and net sales data for the whole period Source:
The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. 26 The 2013 EU Industrial R&d Investment Scoreboard 1. 2. 2
%)Figure 1. 4. One-year R&d investment and net sales growth and profitability by the Japanese companies.
-15%-10%-5%0%5%10%15%20%2005 2006 2007 2008 2009 2010 2011 2012 R&d investment net sales profitability Note:
The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. The 2013 EU Industrial R&d Investment Scoreboard 27 Box 1. 1. Grouping of industrial sectors according to R&d intensity (R&d as%of net sales) High R&d intensity
sectors (intensity above 5%)include e g. Pharmaceuticals & biotechnology; Health care equipment & services; Technology hardware & equipment;
Software & computer services and Aerospace & defence. Medium-high R&d intensity sectors (between 2%and 5%)include e g.
Electronics & electrical equipment; Automobiles & parts; Industrial engineering & machinery; Chemicals; Personal goods; Household goods;
Support services. Medium-low R&d intensity sectors (between 1%and 2%)include e g. Food producers;
Figure 1. 5 R&d investment trends by the Scoreboard companies for main world regions 0 50 100 150 200 2012 2004 2012 2004 2012
2004 2012 2004 Row-311 Japan-332 US-564 EU-352 R&d investment (Euro bn) world region-number of companies low
The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. 28 The 2013 EU Industrial R&d Investment Scoreboard 1. 2. 3
The 2013 EU Industrial R&d Investment Scoreboard 29 Figure 1. 6 Employment trends by the Scoreboard companies for main world regions. 0 5 10 15
The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. 30 The 2013 EU Industrial R&d Investment Scoreboard The 2013 EU Industrial
R&d Investment Scoreboard 31 2. Top R&d investing companies This chapter describes the performance of individual companies,
highlighting those presenting important changes from the previous year and those showing the best performance in terms of R&d and economic growth over the last 10 years.
Results of the top 100 companies, accounting for 54.6%of the total R&d investment by the 2000 companies, confirm the continued recovery of industrial R&d investment.
72 increased R&d investment (vs. 75 in 2011), including 30 companies with double-digit R&d growth;
%A number of the large increases are for companies that have made substantial acquisitions. 32 The 2013 EU Industrial R&d Investment Scoreboard General trends In the 2013 Scoreboard 111 companies have an R&d
investment of more than € 1. 0bn (31 from the EU and 40 from the US) while 55 have R&d exceeding € 2. 0bn (18 from the EU and 21 from the US).
and account for 13.3%of the total R&d investment by the 2000 Scoreboard companies. This year, the top R&d investor is the German company Volkswagen (€ 9. 5bn)
The top 100 companies invested € 295.4 billion, accounting for 54.6%of the total R&d investment by all the 2000 Scoreboard companies,
Seventy-one companies in the top 100 have shown positive R&d investment growth. Among them, 30 companies had double-digit R&d growth
Among these, three companies decreased R&d investments and net sales by more than 10%:%Renesas, Japan; Nokia, Finland and Vale, Brazil.
the figures of VOLKSWAGEN include those of its new subsidiary PORSCHE that in 2011 reported €1046 of R&d investment.
The 2013 EU Industrial R&d Investment Scoreboard 33 R&d changes driven by Mergers and Acquisitions (M&as) The growth in R&d investment may
either be driven organic or by M&as, or it may be a combination of the two. M&as (or demergers) may take place within
14353.2 SYNTHES INC. SHAREHOLDERS 14/06/2012 Acq. 100%GOOGLE 9758.0 MOTOROLA MOBILITY SHAREHOLDERS 22/05/2012 Acq. 100%NESTLÉ SA 9125.7
/2011 Acq. 100%BRISTOL-MYERS SQUIBB 5647.6 AMYLIN PHARMACEUTICALS INC. SHAREHOLDERS 08/08/2012 Acq. 100%VOLKSWAGEN 4490.0 PORSCHE AG PORSCHE AUTOMOBIL 01/08
INVESTMENTS SCA 01/08/2013 Acq. 100%GENERAL ELECTRIC 2535.9 LUFKIN INDUSTRIES INC. 01/07/2013 Acq. 100%GLAXOSMITHKLINE 2463.7 HUMAN GENOME
WEISEL 05/07/2012 Acq. 100%GLAXOSMITHKLINE 250.0 OKAIROS AG NOVARTIS VENTURE 29/05/2013 Acq. 100%SAMSUNG ELECTRONICS 239.9 CSR PLC
and net sales by more than 200%since 2004 while showing positive operating profits in the last reporting period.
India and Brazil (see table 2. 3). The 2013 EU Industrial R&d Investment Scoreboard 35 Figure 2. 1. The world's top 50 companies by their total
R&d investment (€m) in the 2013 Scoreboard. 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000
, USA 3. MICROSOFT, USA 2. SAMSUNG ELECTRONICS, South korea 1. VOLKSWAGEN, Germany R&d investment (Euro million) USA EU Japan South korea Switzerland
The 2013 EU Industrial R&d Investment Scoreboard. European commission, JRC/DG RTD. 36 The 2013 EU Industrial R&d Scoreboard Rank in 2012 Company Rank change 2004-2012 1 VOLKSWAGEN up 7
The 2013 EU Industrial R&d Investment Scoreboard 37 Table 2. 3. Ranking of companies among the top 100 R&d investors that achieved the best performance over the last 10 years*.
increased simultaneously R&d investment and net sales by more than 200%from 2004 to 2012 and had positive operating profits in 2012.
Source: The 2013 EU Industrial R&d Investment Scoreboard. European commission, JRC/DG RTD. 38 The 2013 EU Industrial R&d Scoreboard The 2013 EU Industrial R&d Investment Scoreboard 39 3. R&d distribution
by industrial sector This chapter presents the main R&d trends among Scoreboard companies aggregated by industrial sectors11.
It comprises the ranking of sectors by their level of R&d investment, R&d intensities, rates of R&d growth and the comparison of such trends across world regions.
Key findings Companies from three out of the top five sectors by level of R&d investment increased R&d above the world average of 6. 2%
namely Software & Computer Services (11.7%),Automobiles & Parts (8. 9%)and Technology Hardware & Equipment (8. 8%).The top R&d investing sector, Pharmaceuticals and Biotechnology achieved a more modest
4. 1%increase of R&d. Other sectors that showed high R&d growth were the Industrial Engineering (9. 8%)and Health care Equipment & Services (8. 3%)sectors.
Companies based in the EU had the highest R&d growth in Automobile & Parts (14.4%),Software & Computer Services (14.2%)and the Industrial Engineering (12.3%)sectors.
Trends observed in the Scoreboard over the last 10 years show a characteristic sector specialisation by region.
%)The main R&d shares of those based in the US specialise in high R&d-intensive sectors, namely Technology Hardware & Equipment (25.2%),Pharmaceuticals & Biotechnology (22.1%)and Software & Computer Services (18.2%).
represented by the share of sectors within the regions'total R&d investment, is given in figure 3. 2. R&d investment in the Scoreboard remains highly concentrated by sectors:
Out of 40 industrial sectors, the top three Pharmaceuticals & Biotechnology, Technology Hardware & Equipment and Automobiles & Parts account for 50.2%of the total R&d investment by the Scoreboard companies;
A similar concentration of R&d by industrial sector has been observed over the last 10 years. 11 According to the Industry Classification Benchmark (ICB) applied in the Scoreboard. 40 The 2013 EU Industrial R&d Scoreboard The ranking
slightly increasing its R&d share of the total R&d investment which is now 18.1%.%It is followed by the Technology Hardware & Equipment sector with a share of 16.4%(similar to last year's 16.6%)and the Automobile & Parts sector with 15.7%,slightly higher than the 15.0%of last year.
The R&d specialisation (share of R&d investment) of the main regions in the top 3 sectors are:
the US contributes 74.4%to Software and Computer Services, 63.8%to Health care Equipment & Services and 54.0%to Technology Hardware & Equipment and;
The following points are observed for the top 15 sectors accounting for 92.1%of the total R&d investment of the Scoreboard companies:
Worldwide, the Software & Computer Services sector shows the highest one-year growth rate (11.8), %followed by Industrial Engineering (9. 8%),Automobiles & Parts (8. 9%)and Technology Hardware & Equipment (8. 8%)sectors.
%followed by the Software & Computer Services (14.2%)and Industrial Engineering (12.3%)sectors. Sectors showing the lowest one-year R&d growth are Banks (for which only the EU companies report R&d,-6. 8%),Fixed Line Telecom(-4. 6%
and Technology Hardware & Equipment(-2. 3%).The 2013 EU Industrial R&d Investment Scoreboard 41 Among the companies based in the US,
& Computer Services (12.6%)and Industrial Engineering (9. 4%).Sectors showing the lowest one-year R&d growth are Food Producers(-12.4%)and Leisure Goods(-4. 6%).For Japanese companies,
& Parts (6. 4%)and Health care Equipment & Services (4. 9%).The poorest performance was shown by General Industrials(-9. 7%)and Electronic & Electrical Equipment(-6. 9%).Apart
The alternative energy sub-sector that has shown a substantial increase of R&d investment over the past years sharply reduced R&d in 2012(-26.1%).
& Biotechnology Technology Hardware & Automobiles & Parts Software & Computer Services Electronic & Electrical Equipment Industrial Engineering Chemicals Aerospace & Defence General Industrials Leisure Goods
Health care Equipment & Services Oil & Gas Producers Fixed Line Telecommunications Banks Food Producers R&d investment 2012 (€ bn) EU USA Japan
The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. 42 The 2013 EU Industrial R&d Scoreboard Figure 3. 2. R&d
& Computer Services Electronic & Electrical Equipment Industrial Engineering Chemicals Aerospace & Defense General Industrials Leisure Goods Other Source:
The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. The 2013 EU Industrial R&d Investment Scoreboard 43 Table 3. 1. Ranking of top 15 industrial sectors by overall one-year R&d growth for the EU
, US and Japanese companies in the 2013 Scoreboard. Rank Sector Overall oneyear R&d growth(%)EU-527 R&d change(%)1 year 3 years US-658 R&d change(%)1 year 3 years
Japan-353 R&d change(%)1 year 3 years 1 Software & Computer Services 11.8 14.2 10.0 12.6 10.4-4. 7-8. 4
9. 7-4. 1-0. 5 5 Health care Equipment & Services 8. 3 8. 7 7. 6 8. 5 6. 2
The 2013 EU Industrial R&d Investment Scoreboard. European commission, JRC/DG RTD 44 The 2013 EU Industrial R&d Scoreboard R&d intensity by sector Table 3. 2 provides the list of industrial sectors ranked by worldwide
Some industrial sectors increased their R&d intensity as R&d investment increased more than net sales in 2012,
%Pharmaceuticals & Biotechnology, IT sectors (Software & Computer Services and Technology Hardware & Equipment) and Leisure Goods. The sector with the lowest R&d intensity is Oil & Gas Producers (0. 3
the R&d intensity of EU companies is larger than that of the US and Japan in 6 sectors (Software & Computer Services, Technology Hardware & Equipment, Industrial Engineering,
R&d Investment Scoreboard 45 Table 3. 2. Ranking of industrial sectors by overall R&d intensity for the EU
intensity,%1 Pharmaceuticals & Biotechnology 14.4 13.9 15.8 13.2 2 Software & Computer Services 9. 9 12.6 11.5 4. 8 3 Technology
. 2 7 Automobiles & Parts 4. 2 5. 1 3. 7 4. 3 8 Health care Equipment & Services 4. 1 3. 6
The 2013 EU Industrial R&d Investment Scoreboard. European commission, JRC/DG RTD 46 The 2013 EU Industrial R&d Scoreboard Growth of net sales and profitability by industrial sector Table 3. 3 shows the ranking
%followed by Software & Computer Services (7. 4%),Food Producers (7. 3%)and Aerospace & Defence (6. 4%).Regarding the automotive sales,
the highest profitability is shown in Pharmaceuticals & Biotechnology (19.0%)and Software & Computer Services (18.2%).
the Software & Computer Services sector shows the highest one-year growth rate for sales (6. 9%)followed by Technology Hardware
%and Oil & Gas Producers(-3. 0%).The US-based companies have the highest profitability in Software & Computer Services (23.9%)and Pharmaceuticals & Biotechnology (21.7%).
& Services sector(-1. 7%).The profitability of companies based in Japan is generally lower than their counterparts in the EU and the US, for example 8. 9%in Pharmaceuticals & Biotechnology vs. 19.0%for the EU companies.
The 2013 EU Industrial R&d Investment Scoreboard 47 Table 3. 3. Ranking of top 15 industrial sectors by overall one-year sales growth for the EU
Worldwide EU-527 US-658 Japan-353 Rank Sector Sales growth 1y(%)Sales growth 1y(%)Profit.*
*Sales growth 1y(%)Profit.**Sales growth 1y(%)Profit.**1 Automobiles & Parts 8. 8 11.3 5. 2 0. 0-3. 2 11.9 5. 6 2 Software & Computer Services 7
. 4 9. 7 18.2 6. 9 23.9-0. 2 2. 8 3 Food Producers 7. 3 10.1 10.7 3. 8
10.4 1. 6 3. 5 4 Aerospace & Defence 6. 4 8. 3 7. 0 6. 7 9. 0 5 Electronic
. 7 2. 8 9. 4-3. 0 16.7 2. 3 1. 8 7 Health care Equipment & Services 3. 5 8. 7
operating profits as percentage of net sales. Source: The 2013 EU Industrial R&d Investment Scoreboard. European commission, JRC/DG RTD 48 The 2013 EU Industrial R&d Scoreboard Changes in indicators by region and sector groups It is interesting to see the distribution of R&d investment of the Scoreboard companies across regions
and sectors using an aggregation of the 40 industrial sectors into four groups of high-,medium-high,
-medium-low-and low-R&d intensity (see Box 1. 1 in chapter 1). The worldwide and domestic distribution of the R&d investment by the 2000 Scoreboard companies shows clear
differences by world region, illustrating respectively the weight of the region in the world and its specialisation (See Table 3. 4):
Two sectors, Automobiles & Parts and Industrial Engineering, account for almost 70%of the total R&d investment of the EU's medium-high R&d intensity group.
Technology Hardware & Equipment and Software & Computer Services, account for almost 90%of the total R&d investment of the US's high R&d intensity group.
The 2013 EU Industrial R&d Investment Scoreboard. European commission, JRC/DG RTD The 2013 EU Industrial R&d Investment Scoreboard 49 4. The top 1000 R&d investors in the EU This chapter discusses the R&d
and economic trends of companies based in Members States of the EU. This specific analysis is extended based on an sample of companies representing the top 1000 R&d investors in the EU,
and 473 additional companies based in the EU. The main questions addressed are firstly about the one-year changes in R&d and economic indicators of companies based in the top 10 Member States by level of R&d investment.
Software & Computer Services 113: UK 47, France 21, Germany 19 Pharmaceuticals & Biotechnology 112: UK 30, France 18 Industrial Engineering 112:
and lower reaches of the top 1000 EU Scoreboard companies across the 6 largest sectors in terms of R&d investments.
of EU 1000 (number of firms) Pharmaceuticals & Biotechnology 59 (23%)52 (21%)Software & Computer Services 37 (14%)74 (30%)Technology Hardware & Equipment
The 2013 EU Industrial R&d Investment Scoreboard. European commission, JRC/DG RTD. A closer look at the lower reaches of the EU Scoreboard companies (i e.
More than 55%of these companies in the sectors of Electronic and Electrical Equipment, Pharmaceuticals & Biotechnologies and Software & Computer services have a higher R&d intensity than the average of the 527 EU companies.
The 2013 EU Industrial R&d Investment Scoreboard 51 Co in the top 10 EU Member States With respect to the sector distribution of R&d intensity by country, the following
The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. 52 The 2013 EU Industrial R&d Scoreboard (compared to that of the top 527 EU companies),
Swedish and UK companies in the Software and Computer Services sector show high performances as more than 80%display a higher R&d intensity than the upper reach average.
Similar cases occur in Finland where Nokia's R&d investment accounts for almost 74%of the total R&d by Finnish companies and in Ireland with Seagate The 2013 EU Industrial R&d Investment Scoreboard
The 2013 EU Industrial R&d Investment Scoreboard. European commission, JRC/DG RTD. Long-term performance of companies based in the 3 top EU Member States The annual growth rates of R&d investment and net sales and profitability of companies based in Germany,
France and the UK is provided respectively in figures 4. 2, 4. 3 and 4. 4 for the period 2004-2012.
Companies based in Germany seem to have recovered the levels of growth of R&d investment and net sales prior to the crisis. 54 The 2013 EU Industrial R&d Scoreboard Since 2012,
-10%-5%0%5%10%15%20%25%2005 2006 2007 2008 2009 2010 2011 2012 nominal growth R&d investment
for 135 German out of the EU1000 companies with data for the whole period*Profitability expressed as companies'profits as percentage of net sales Source:
The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. The 2013 EU Industrial R&d Investment Scoreboard 55 Figure 4. 3 Annual R&d and net sales growth and profitability*by The french companies-10%-5%0
%5%10%15%20%25%2005 2006 2007 2008 2009 2010 2011 2012 nominal growth R&d investment net sales profitability Note:
for 81 French out of the EU1000 companies with data for the whole period*Profitability expressed as companies'profits as percentage of net sales Source:
The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. Figure 4. 4 Annual R&d and net sales growth and profitability*by the UK companies Note:
for 122 UK out of the EU1000 companies with data for the whole period.**Profitability expressed as companies'profits as percentage of net sales Source:
The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. 56 The 2013 EU Industrial R&d Scoreboard R&d intensity trends by companies
based in selected Member States In 2012, for the second consecutive year, the average R&d intensity of the EU-1000 companies increased slightly because of the higher increase of R&d investments compared to that of net sales,
6. 1%vs. 4. 3%(see Figure 4. 5). It is important to remember that a few large
The 2013 EU Industrial R&d Investment Scoreboard European commission, JRC/DG RTD. The 2013 EU Industrial R&d Investment Scoreboard 57 5. Sector focus:
Health & biotechnology 2005-13 This chapter reviews the healthcare sector and focuses on therapeutic biotechnology and pharmaceuticals and analyses the role of the Scoreboard companies operating in this industry.
The demand for new medicines is growing due to rising and ageing populations and the increasing wealth of emerging nations.
At the same time technological advances in therapeutic biotech have opened up new opportunities. The big pharmaceutical companies have responded to these challenges first by pharmaceutical acquisitions to reduce costs
7%environment & industrial processing and 19.2%services (including technology services) The segmentation by region was The americas 45.4%,Europe 26.1%,Asia Pacific 26.1,
and the companies involved we need to describe the main features of the business environment in
which these major changes are occurring. 5. 2 The business environment for healthcare There are four major trends occurring in healthcare
which are driving changes in the whole business environment. These are: The increasing demand for healthcare due to ageing populations and the growing wealth of developing countries.
The proportion of the world population over 60 will more than double from 10%in 2000 to 21%in 2050.
Increased regulation and demands for proof of increased efficacy for new drugs have occurred as a response to safety concerns and rising costs.
The 2013 EU Industrial R&d Investment Scoreboard 59 The business response of the big pharmaceutical companies to the challenges of patent expiries, increased regulation, reduced R&d productivity (because of the increasing
sales and profits of both biotech and pharma companies in the Scoreboard from 2005 to 2012 and how these reflect the changes in the healthcare landscape
While global pharmaceutical companies have benefited from the increasing demand for new and better drugs, they have faced also a series of challenges over the last decade including increased regulation and CEA.
18,832 67,986 17,269 104,087 R&d investment, € m 1, 190 10,300 445 12,000 Net sales, € m 5, 450 40,100 4, 890 50
589,294 529,622 1, 714,922 R&d investment, € m 26,500 33,700 27,500 87,700 Net sales, € m 192,000 225,000 208,000 624,000 R&d
intensity(*)14%15%13%14%Profitability(*)19%23%16%19%The 2013 EU Industrial R&d Investment Scoreboard 61 Given the large number
The 2013 EU Industrial R&d Investment Scoreboard 63 Table 5. 3 Top 25 Biotechnology specialised R&d investors in 2005 seven year later
FISHER SCIENTIFIC INC.-Health care Equipment & Services) 64 The 2013 EU Industrial R&d Scoreboard Despite this acquisition activity, there was only a modest increase in R&d from 2005 to 2012 for many
Roche acquired full ownership of Genentech for $46. 8bn (it already had a majority shareholding).
The message of this chapter is that large pharmaceutical companies have adopted two strategies in the last decade to overcome the challenges outlined in section 2. The first was The 2013 EU Industrial R&d Investment Scoreboard 65 the acquisition
Sanofi has a 16%shareholding in Regeneron and can increase this to 30%under their existing agreement.
The 2013 EU Industrial R&d Investment Scoreboard 67 6. Company foreign direct investments This chapter looks at the foreign direct investments (FDIS) of Scoreboard companies as a proxy
FDI is defined as an investment made to acquire lasting interest in enterprises operating outside of the economy of the investor.
Additional to having an equity capital or reinvested earnings in an enterprise, there are other ways in
which foreign investors may acquire an effective voice in the management of an enterprise. These include franchising, subcontracting, management contracts,
turnkey arrangements12, leasing, licensing and production-sharing. There are two types of FDIS used for market entry purposes:
the number of greenfield projects greatly surpasses the number of M&a projects (World Investment Report, UNCTAD, 2012).
Greenfield Foreign Direct Investments consist in the expansion of existing facilities or a direct investment in new facilities (in an area where no previous facilities exist).
Greenfield FDIS are the primary objective of a host nation's promotional efforts, as they create new production capacity
The EU attracts more technological intensive projects than resource-saving investments compared to the other economies.
the developer is hired to finish the entire project without owner input. 13 Sample corresponding to the 2012 EU Industrial R&d Investment Scoreboard edition. 14 Greenfield investment data is derived from the 2013 fdi
which accounts for more than 110,000 greenfield investment projects around the world for the period 2003-2011.
For the purpose of the analysis, intra-European FDIS and intrastate US investments are excluded. The breakdown of FDIS by activity and geographical area and the growth rates over the period of the different categories of investments (manufacturing, R&d and others) are presented in Table 6. 1. Greenfield FDIS in manufacturing activities represent the highest share
both in terms of value (60%of total capital investments) and number of projects (39%.%The shares for FDIS on R&d are 5%and 12%respectively.
Table 6. 1: Decomposition of FDIS by activity FDI type N. of projects € bn Manufacturing 10514 1219 Sales & Marketing 4311 36 Research & development 3342 97 Retail
2035 42 Logistics, Distribution & Transport. 1270 83 Business Services 1229 31 Headquarters 1086 29 Maintenance & Services 559 8 ICT & Internet
Shared Services 228 4 Construction 123 24 Recycling 50 2 Total 27208 2030 Source Region Outflows(%€ 2030 bn) Projects
The 2013 EU Industrial R&d Investment Scoreboard, European commission, JRC/DG RTD. The 2013 EU Industrial R&d Investment Scoreboard 69 Looking at the geographical distribution, top EU R&d investors appear as the main source of greenfield FDIS, both in terms of
value (42%of the total versus 25%for their US counterparts) and of number of projects (36%versus 30%for US top R&d investors.
Table 6. 2 highlights the top 10 European (red) and non-European (black) countries responsible for the larger shares of worldwide direct investment flows.
The table reports the number of investment projects, estimated capital expenditure (in billions of Euro) and estimated number of jobs created (in thousands).
The 2013 EU Industrial R&d Investment Scoreboard, European commission, JRC/DG RTD. 15 Analysing a different sample,
similar results have been reported by the"Foreign direct investment statistics"(Eurostat), http://epp. eurostat. ec. europa. eu/statistics explained/index. php/Foreign direct investment statistics. 70 The 2013 EU Industrial R&d Scoreboard The two top investing countries
In contrast, the top destination countries are the emerging economies of China, India, Russia, and Brazil,
The 2013 EU Industrial R&d Investment Scoreboard, European commission, JRC/DG RTD. Table 6. 4 displays in more detail the destination of the 856 FDI projects in R&d made by the EU Scoreboard companies during the period 2003-2012.
The main destinations are the BRICS (49%of projects and 48%of the total capital investment) and the US (18%and 21%,respectively.
The 2013 EU Industrial R&d Investment Scoreboard 71 Table 6. 4: Where do EU Companies locate R&d investment?
Source N. of projects Capex (€ bn) USA 1730 48.8 EU 856 25.4 Japan 383 8. 2 Switzerland 134 6. 6
The 2013 EU Industrial R&d Investment Scoreboard, European commission, JRC/DG RTD. Table 6. 5: From which companies do EU receive FDI in R&d?
The 2013 EU Industrial R&d Investment Scoreboard, European commission, JRC/DG RTD. 72 The 2013 EU Industrial R&d Scoreboard Figure 6. 6 compares the inflows
we observe that the EU has a larger share of the more knowledge-intensive projects (R&d) than resource-saving investments (manufacturing).
The 2013 EU Industrial R&d Investment Scoreboard, European commission, JRC/DG RTD. The 2013 EU Industrial R&d Investment Scoreboard 73 Sector distribution of FDIS in R&d The identification of the key industrial sectors in which the top R&d spenders of the Scoreboard allocate their investments
abroad has been made on the basis of a sample of companies for which data is available for the period 2003-2012.
This confirms the importance of such investments as drivers for knowledge enhancement. In the EU, this percentage reduces to 83%.
The 2013 EU Industrial R&d Investment Scoreboard, European commission, JRC/DG RTD. 16 The other types of FDIS are:
sales & marketing, retail, logistics, distribution & transportation, business services, headquarters activities, maintenance & services, ICT & internet infrastructures, education & training, extraction, customer contact
, electricity, technical support, shared services, construction, recycling. 74 The 2013 EU Industrial R&d Scoreboard Figure 6. 8 reports on the industries and regions that originate the highest volumes
As the graph shows, most of the investments in R&d (60%of the total capital investment of €97. 0bn) are concentrated in ICT (production and services), Pharmaceuticals & Biotechnology,
The 2013 EU Industrial R&d Investment Scoreboard, European commission, JRC/DG RTD. The main actors of this knowledge-seeking type of investment are the US and EU, Japan mainly for the automobiles industry and Switzerland for ICT production and Pharmaceuticals.
This suggests that advanced economies are getting access to technological complementary knowledge by investing abroad. 17 The role and internationalisation strategies of multinational companies in innovation,
2013 DG ENTR http://ec. europa. eu/enterprise/policies/innovation/files/proinno/innovation-intelligence-study-6 en. pdf The 2013 EU Industrial
R&d Investment Scoreboard 75 Annex 1-Background information The Scoreboard is part of the European commission's monitoring activities to improve the understanding of trends in R&d investment by the private sector
and the factors affecting it. It was created in response to the Commission's Research Investment Action Plan18,
which aims to help close the gap between the EU's R&d investment and that of other developed economies.
The annual publication of the Scoreboard is intended to raise awareness of the importance of R&d for businesses
and to encourage firms to disclose information about their R&d investments and other intangible assets. The data for the Scoreboard are taken from companies'publicly available audited accounts.
the company's whole R&d investment in the Scoreboard is attributed to the country in which it has registered its office19.
while BERD data are used primarily by economists, governments and international organisations interested in the R&d performance of territorial units defined by political boundaries.
which provides reliable up-to-date information on R&d investment and other economic and financial data, with a unique EU-focus.
Companies can use the Scoreboard to benchmark their R&d investments and so find where they stand in the EU and in the global industrial R&d landscape.
Investors and financial analysts can use the Scoreboard to assess investment opportunities and risks. 18 Investing in research:
the Scoreboard collects data from audited financial accounts and reports whereas BERD typically takes a stratified sample,
while the Scoreboard uses the ICB (the International Classification Benchmark). 21 According to latest Eurostat statistics.
government and business organisations can use R&d investment information as an input to policy formulation or other R&d-related actions.
The 2013 EU Industrial R&d Investment Scoreboard 77 Annex 2-Methodological notes The data for the ranking of the 2013 EU Industrial R&d Scoreboard (the Scoreboard) have been collected from companies
The R&d investment included in the Scoreboard is the cash investment which is funded by the companies themselves.
It excludes R&d undertaken under contract for customers such as governments or other companies. It also excludes the companies'share of any associated company or joint venture R&d investment when disclosed.
Where part or all of R&d costs have been capitalised, the additions to the appropriate intangible assets are included to calculate the cash investment
and any amortisation eliminated. Companies are allocated to the country of their registered office. In some cases this is different from the operational or R&d headquarters.
Companies are in industry sectors according to the NACE Rev. 222 and the ICB (Industry Classification Benchmark.
relies on disclosure of R&d investment in published annual reports and accounts. Therefore, companies which do not disclose figures for R&d investment
or which disclose only figures which are not material enough are included not in the Scoreboard.
Due to different national accounting standards and disclosure practice, companies of some countries are less likely than others to disclose R&d investment consistently.
The R&d investment disclosed in some companies'accounts follows the US practice of including engineering costs relating to product improvement.
and the impact of this practice is a possible overstatement of some overseas R&d investment figures in comparison with the EU. Where R&d income can be identified clearly
so that the R&d investment included in the Scoreboard excludes R&d undertaken under contract for customers such as governments or other companies.
This means a possible overstatement of some R&d investment figures in the Scoreboard for companies with directly R&d related income where this is not disclosed in the annual report.
The focus of the Scoreboard on R&d investment as reported in group accounts means that the results can be independent of the location of the R&d activity.
and Capex investment to be related to outputs such as Sales, Profit, productivity ratios and market capitalisation.
Further, the Scoreboard collects data from audited financial accounts and reports. BERD typically takes a stratified sample,
and the sectoral classification they use (BERD follows NACE, the European statistical The 2013 EU Industrial R&d Investment Scoreboard 79 classification of economic sectors,
while the Scoreboard classifies companies'economic activities according to the ICB classification). Sudden changes in R&d figures may arise because a change in company accounting standards.
For many highly diversified companies, the R&d investment disclosed in their accounts relates only to part of their activities,
whereas sales and profits are in respect of all their activities. Unless such groups disclose their R&d investment additional to the other information in segmental analyses
it is not possible to relate the R&d more closely to the results of the individual activities which give rise to it.
/80 The 2013 EU Industrial R&d Scoreboard Glossary of definitions 1. Research and development (R&d) investment in the Scoreboard is the cash investment funded by the companies themselves.
It excludes R&d undertaken under contract for customers such as governments or other companies. It also excludes the companies'share of any associated company or joint venture R&d investment.
being disclosed that in the annual report and accounts, it is subject to the accounting definitions of R&d.
USA $ 1. 2939 $ 1. 32 Taiwan $ 39.1696 $ 38.28 The 2013 EU Industrial R&d Investment Scoreboard 81 based on
Development is the application of research findings or other knowledge to a plan or design for the production of new or substantially improved materials, devices, products, processes, systems or services before the start of commercial production
the additions to the appropriate intangible assets are included to calculate the cash investment and any amortisation eliminated. 2. Net sales follow the usual accounting definition of sales,
sales are defined as Gross premiums written plus any banking income. 3. R&d intensity is the ratio between R&d investment and net sales of a given company or group of companies.
BERD, where R&d intensity is added based on value instead of net sales. 4. Operating profit is calculated as profit (or loss) before taxation
or year end employees if average not stated. 82 The 2013 EU Industrial R&d Scoreboard The 2013 EU Industrial R&d Investment Scoreboard 83 Annex 3 Composition of the top
and additional 473 companies also ranked by level of R&d investment. The composition by country and industry of the EU 1000 sample is presented in the table A3. 1 below.
16 2 5 12 18 1 4 1 6 4 76 Equity Investment Instr. 1 1 Financial services 4 1 6
1 1 10 1 2 5 33 General Retailers 4 1 6 11 Health care Equipment & Services 2 13 2 2
Services & Distrib. 2 1 3 6 Personal Goods 1 6 4 3 2 16 Pharmaceuticals & Biotechnology 1 4 13 13
4 2 18 29 1 1 4 5 3 1 11 1 111 Real estate Investment & Services 1 1 2 Software
& Computer Services 2 19 2 2 5 21 45 1 4 2 1 7 111 Support Services 10 2 19
2013 EU Industrial R&d Investment Scoreboard 85 Annex 4-Access to the full dataset The 2013 Scoreboard comprises two data samples:
The top 1000 R&d investing companies based in the EU with R&d investment exceeding €5. 2m.
R&d investment Net sales Capital expenditure Operating profit or loss Total number of employees Main company indicators (R&d intensity, Capex intensity, Profitability) Growth rates of main
The 2013 EU Industrial R&d Investment Scoreboard Authors: Héctor Hernández, Alexander Tübke, Fernando Hervás, Antonio Vezzani, Sara Amoroso, Mafini Dosso Luxembourg:
of the 2013"EU Industrial R&d Investment Scoreboard"(the Scoreboard. The Scoreboard contains economic and financial data for the world's top 2000 companies ranked by their investments in research and development (R&d.
The sample consists of 527 companies based in the EU and 1473 companies based elsewhere.
In this Scoreboard edition, world top R&d investors show a remarkable resilience of R&d investment growth in a period of economic uncertainty.
In 2012, companies continued to increase significantly their R&d investments in a context marked by a slow down of net sales growth and a decline in operating profits.
Trends observed show a significant variation of R&d investment and economic results across industries and sectors.
The 2013 EU Industrial R&d Investment Scoreboard 87
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