The 2011 EU industrial R&D investment SCOREBOARD

1 The 2011 EU industrial R&D investment SCOREBOARD Joint Research Centre European Commission Héctor Hernández Alex Tuebke Fernando Hervás

1. Background 2 Understanding the dynamics of industrial R&D at the firm level Top R&D investors 1000 EU and 1000 non-eu; 455.9 bn (~85% of world BERD) Nominal data R&D and financial indicators from latest available companies accounts (4 years) Scoreboard vs BERD Different/complementary perspective: Company vs territorial Main limitation Undisclosed location of the R&D investment and technological profile

R&D investment by region Figure 3. R&D investment by the top 1400 companies, by main world regions (% of total 455.9bn) 3 Italy 1.4 % Sweden 1.5 % The Netherlands 2.1 % United Kingdom 4.4 % Denmark 0.8 % Finland 1.3 % France 5.3 % Gernany 10.1 % other EU 2.0 % EU 29.0 % Switzerland 4.5 % USA 35.1 % Other 14.2 % South Korea 3.0 % China 1.7 % Taiwan 1.6% Japan 21.7% Australia 0.5 % other RoW 2.9 % Source: The 2011 EU Industrial R&D Investment Scoreboard European Commission, JRC/DG RTD. Scoreboard companies are mostly based in the Triad

2. Overall R&D trends 4

2. Overall R&D trends Figure S1. One-year R&D investment, net sales and employment growth of the Scoreboard companies 5 nominal growth 12% 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% -12% 2003 2004 2005 2006 2007 2008 2009 2010 R&D investment net sales employment (number of employees) Note: The different Scoreboards are not directly comparable because of changes in the sample composition. Source: The EU Industrial R&D Investment Scoreboards (of 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011) European Commission, JRC/DG RTD. Worldwide R&D investment bounces back

2. Overall R&D trends 6 Figure S2. Growth of R&D investment and net sales in the Scoreboard nominal growth rate 15% 10% 5% 0% -5% -10% -15% R&D investment net sales 2008 2009 2010 2008 2009 2010 EU ( 132 bn) US ( 160 bn) country (total R&D investment) Source: The 2011 EU Industrial R&D Investment Scoreboard European Commission, JRC/DG RTD.. but EU R&D growth is lagging behind the US.

2. EU sample highly concentrated Figure S4. R&D investment shares in Germany, France and the UK, by sector group 7 R&D investment 2010 ( bn) 10 20 30 40 50 2010 Germany 2009 2008 2007 2010 France 2009 2008 UK 2007 2010 2009 2008 2007 high medium-high medium-low low Split of sectors as in Figure S4. Source: The 2011 EU Industrial R&D Investment Scoreboard European Commission, JRC/DG RTD. - Most R&D increase in Germany is due to Automobiles - The 3 largest MS keep high level of R&D in high tech

3. Top R&D companies 8

R&D investment (Euro million) 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 3. Top 50 R&D companies 15 EU 18 US 13 JP 4 RoW Source: The 2011 EU Industrial R&D Investment Scoreboard, EC, JRC/DG RTD, ranks in previous years in brackets 1. Roche, Switzerland (2) 2. Pfizer, USA (5) 3. Microsoft, USA (3) 4. Toyota Motor, Japan (1) 5. Merck US, USA (16) 6. Volkswagen, Germany (4) 7. Samsung Electronics, South Korea (10) 8. Novartis, Switzerland (6) 9. General Motors, USA (12) 10. Johnson & Johnson, USA (8) 11. Nokia, Finland (7) 12. Intel, USA (17) 13. Daimler, Germany (14) 14. Sanofi-Aventis, France (9) 15. Panasonic, Japan (18) 16. GlaxoSmithKline, UK (15) 17. Honda Motor, Japan (13) 18. Siemens, Germany (11) 19. Sony, Japan (19) 20. Cisco Systems, USA (20) 21. Robert Bosch, Germany (21) 22. IBM, USA (22) 23. Ford Motor, USA (23) 24. Eli Lilly, USA (28) 25. Nissan Motor, Japan (24) 26. Hitachi, Japan (26) 27. Oracle, USA (41) 28. Bayer, Germany (29) 29. AstraZeneca, UK (27) 30. EADS, The Netherlands (30) 31. Ericsson, Sweden (37) 32. Toshiba, Japan (31) 33. General Electric, USA (38) 34. Canon, Japan (40) 35. Boeing, USA (36) 36. Google, USA (47) 37. Abbott Laboratories, USA (50) 38. BMW, Germany (35) 39. Takeda Pharmaceutical, Japan (25) 40. Bristol-Myers Squibb, USA (34) 41. Alcatel-Lucent, France (32) 42. NTT, Japan (45) 43. NEC, Japan (33) 44. Denso, Japan (42) 45. Boehringer Ingelheim, Germany (44) 46. Peugeot (PSA), France (39) 47. Hewlett-Packard, USA (48) 48. Amgen, USA (46) 49. LG, South Korea (66) 50. Fujitsu, Japan (51) 9

3. Top R&D companies Ranking of the Scoreboard top 50 in 2004 and 2010 Big climbers: Google Panasonic Oracle LG Big drops: HP Ericsson Source: The EU Industrial R&D Investment Scoreboards 2004-2010. EC, JRC/DG RTD. Table 4. Ranking of the Scoreboard top 50 in the 2004 and 2011 Scoreboards. Rank in 2011 Company Rank change 2004-2011 1 Roche up 17 2 Pfizer 0 3 Microsoft up 10 4 Toyota Motor up 1 5 Merck US up 24 6 Volkswagen up 2 7 Samsung Electronics up 26 8 Novartis up 12 9 General Motors down 3 10 Johnson & Johnson up 2 11 Nokia down 1 12 Intel up 2 13 Daimler down 10 14 Sanofi-Aventis up 41 15 Panasonic up 132 16 GlaxoSmithKline down 5 17 Honda Motor down 1 18 Siemens down 14 19 Sony down 4 20 Cisco Systems up 11 21 Robert Bosch up 5 22 IBM down 13 23 Ford Motor down 22 24 Eli Lilly up 17 25 Nissan Motor up 9 26 Hitachi down 2 27 Oracle up 44 28 Bayer up 4 29 AstraZeneca down 4 30 EADS up 5 31 Ericsson down 14 32 Toshiba down 2 33 General Electric up 4 34 Canon up 5 35 Boeing up 22 36 Google up > 1000 37 Abbott Laboratories up 15 38 BMW down 10 39 Takeda Pharmaceutical up 33 40 Bristol-Myers Squibb up 2 41 Alcatel-Lucent up 6 42 NTT down 21 43 NEC down 3 44 Denso up 8 45 Boehringer Ingelheim up 17 46 Peugeot (PSA) down 8 47 Hewlett-Packard down 24 48 Amgen up 8 49 LG up 61 50 Fujitsu down 14 Note : Companies in "blue" went up more than 30 ranks and companies in "red" lost more than 10 ranks. Source: The EU Industrial R&D Investment Scoreboards 2011 and 2004. European Commission, JRC/DG RTD. 10

4. R&D investment by sector 11

4. R&D investment by sector Figure 5. R&D ranking of industrial sectors and share of main world regions for the world's top 1400 companies 12 R&D investment 2010 ( bn) 10 20 30 40 50 60 70 80 90 Pharmaceuticals & biotechnology Technology hardware & equipment Automobiles & parts Software & computer services Electronic & electrical equipment Chemicals Aerospace & defence Industrial engineering Leisure goods General industrials Health care equipment & services Fixed line telecommunications Oil & gas producers Banks Food producers EU USA Japan other countries Ranked by total worldwide R&D investment of the sector. Source: The 2011 EU Industrial R&D Investment Scoreboard European Commission, JRC/DG RTD. Pharma & biotech sector reinforces its position as top R&D investor worldwide

4. Overall R&D trends EU 2011 US 2011 13 Other medium-high Aerospace & defence Chemicals Electronic & Electrical Equipment Other mediumhigh Aerospace & defence 6% 5% 49% 55% 7% 38% Automobiles & parts EU 2002 7% 33% Pharma & Biotech Pharma & Biotech ICT-related Other high ICT-related Other high Other medium-high Aerospace & defence Chemicals Electronic & Electrical Equipment Automobiles & parts lectronic & Electrical Equipment Other high Other mediumhigh Chemicals 25% 34% 3% 1% US 2002 2% 1% 71% 63% Pharma & Biotech ICT-related Pharma & Biotech The EU is specialised in the mediumhigh and US companies in the high R&D intensity sectors. Chemicals Electronic & Electrical Equipment Automobile & parts Automobile & parts Other high ICT-related High Medium-High Medium-Low Low R&D intensity

EU/US comparison of key industries 14 Sub-sector (4-digit ICB) R&D intensity (%) EU US R&D Investment m) EU US Most R&D intensive (>10%) Biotechnology 17.1 23.9 877.6 7642.7 Semiconductors 21.8 19.1 3344.4 15457.5 Pharmaceuticals 14.5 14.7 19717.5 25097.4 Software 14.6 14.8 3454.3 14320.6 Telecommunications equip. 13.3 14.9 10559.3 10494.9 Internet 12.2 0.0 3167.6 Other, largest R&D investing sectors Automobiles & parts 5.6 4.1 27257.7 9963.5 Chemicals 3.5 2.9 7189.6 3389.6 Electronic equipment 6.4 7.8 958.2 1663.8 Electrical comp. & equip. 4.9 2.6 5623.9 726.7 Computer hardware 12.5 3.8 86.7 6617.1 Aerospace & defence 5.8 3 7834.7 6405.8 Source : The 2010 EU Industrial R&D Investment Scoreboard European Commission, JRC/DG RTD. Similar R&D intensities but much smaller R&D size

A sample of counterpart companies in the EU and the US 15 EU Company R&D Intensity % US Counterpart GlaxoSmith-Kline 12.8 15.5 Pfizer SAP 14.5 12.1 Oracle Nokia 12.2 14.4 Motorola Robert Bosch 9.4 8.8 Delphi AKZO-Nobel 2.3 5.3 DuPont EADS 6.7 5.1 Boeing Volkswagen 5.7 4.1 Ford Michelin 3.4 2.1 Goodyear Unilever 2.2 2.6 Procter & Gamble Electrolux 1.8 2.7 Whirlpool Saint Gobain 1.0 1.3 Owens Corning Royal Dutch Shell 0.4 0.3 Exxon Mobil Note: For each pair, the company with the higher RTD intensity is printed in bold red. Source: The 2010 EU Industrial R&D Investment Scoreboard DG JRC / DG RTD, European Commission Individually, EU companies appear generally as R&D intensive as their US counterparts

5. R&D and employment 16

5. R&D and employment trends Figure S5. One-year employment growth of the Scoreboard companies per sector group 17 12% 10% 8% 6% nominal growth 4% 2% 0% -2% -4% 2003 2004 2005 2006 average net sales growth 2007 2008 2009 2010-6% high R&D intensity -8% medium R&D intensity -10% low R&D intensity -12% For a sample of 1000 (462 EU and 538 non-eu) companies for which data is available for all years in the 2011, 2007 and 2006 Scoreboards adjusted to the 2011 Scoreboard exchange rates. Split of sectors as in Figure 3 with the medium-high and medium-low R&D intensity sectors constituting the medium R&D intensity sectors. Source: The EU Industrial R&D Investment Scoreboards (of 2006, 2007, and 2011) European Commission, JRC/DG RTD. Employment by the Scoreboard companies has also recovered and seems to be more resilient in high R&D-intensity sectors

18 Report available at: http://iri.jrc.es/research/scoreboard_2011.htm