BT and Vodafone lead UK IT R&D spending

Telecoms and software companies are among the UK's top R&D spenders, a government report has revealed.

BT was the third biggest spender, after drugs makers GlaxoSmithKline and AstraZeneca, and mobile network operator Vodafone was the 14th.

Software firms Amdocs and Sage joined the list of the 25 biggest spenders for the first time, according to the 2009 R&D Scoreboard, published by the Department for Business, innovation & skills (BIS).

Based on figures reported for 2008, the 1,000 UK companies undertaking the most R&D increased their investment by 9.2% on the previous year, to £26.6bn. This was largely due to increased spending by firms in the pharmaceuticals and biotechnology, aerospace and defence, software and computer services, and banking sectors.

The UK's 46 biggest investors were responsible for 62% of the UK1000's R&D spending. Their spending on R&D has grown almost twice as fast as their number of employees, which grew by 5.1%.

The fixed line and mobile telecommunications sectors were the eighth and 16th largest contributors respectively to R&D in the UK1000 in 2008. BT and Vodafone together spent 93% of the sector total – 5% of the overall UK1000 spend.

R&D decreased in the UK telecommunications sector in 2008, while sales grew. Of the biggest investors, only Vodafone grew its R&D investment - by 20% - more quickly than its sales.

There are 154 software and computer services companies in the UK1000, more than in any other sector.

R&D spending by companies in the UK software and computer services sector remained more fragmented than in other sectors. The six largest companies in terms of R&D spent 47% of the sector total.

R&D in the software and computer services sector in the UK grew more quickly overall than sales in 2008. While most large investors grew their R&D by a healthy margin, Amdocs reduced its R&D spending slightly, while Symbian Software and Invensys reported lower sales.

Top 25 global companies by R&D expenditure:

* foreign-owned firms

# accounts not prepared using IFRS

Note 1: Figures for Roche Products are from 2007. Figures from 2008 were published after the cut-off date. R&D spend in 2008 was £181m.