Computer firms lead R&D spending

Top companies spent £289bn on research and development in 2007 with computer-related firms leading the way.

Management consultant Booz & Company analysed 1,000 firms that spent the most on R&D. Booz & Company found the 2007 growth rate in R&D spending was well over the compound growth rate of 6.7%.

Two-thirds of R&D spending was concentrated in just three industries in 2007: computing and electronics (29%), health (22%) and automotive (16%).

The top 10 global R&D spenders in 2007 were, in descending order: Toyota, General Motors, Pfizer, Nokia, Johnson & Johnson, Ford, Microsoft, Roche Holding AG, Samsung Electronics and GlaxoSmithKline. Number one spender Toyota spent £4.9bn.

Most of the 1,000 companies (91%) conducted R&D activities in countries outside the nation where they were headquartered.

Companies which spent more than 60% of their R&D budget outside their home countries over the past three years, appeared to enjoy better performance in total shareholder return, operating margin, market cap growth and return on assets, said Booz and Company.

Out of the 1,000 companies analysed, only two British companies, GlaxoSmithKline and Astra Zeneca - both in the health sector - were among the top 20 R&D spenders.

John Potter, partner at Booz and Company, said: "Investment in R&D in the UK is crucial for the country to remain competitive."

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