FREE MEMBERSHIP Includes » ABL Advisor eNews + iData Blasts | JOIN NOW ABLAdvisor Gray ABLAdvisor Blue
 
Skip Navigation LinksHome / News / Read News

Print

Corporate R&D Spending Hits Record Highs for Top 1000

October 25, 2017, 08:00 AM
Filed Under: Economic Reports

Annual worldwide corporate R&D spending broke through $700bn in annual investment, according to an annual analysis of R&D spending across 1000 global public companies by PwC’s Strategy&.

It shows corporate R&D spending increased a steady 3% in the past year, bouncing back from less than 1% increase previously.

However, in a global survey with 562 executive participants, R&D leaders expressed concerns about the growing heat of rhetoric about economic nationalism – and its potential impact on where companies invest in R&D how they conduct innovation.

Overall, 52% of respondents say that a general move toward economic nationalism will have a moderate or significant impact on their companies’ R&D efforts.

Major companies have been conducting some R&D outside their headquarters countries for decades. In 2015 it was determined that 94% of major corporations conduct their R&D in multiple countries.  But increasing attention on regulations and policies for visas, labor movement, and the regulations governing the sharing of knowledge and technology are causing some companies to question how sustainable their integrated global innovation networks are.

Nearly 33% of R&D executives surveyed, report that they have already felt the effects of economic nationalism on their R&D talent acquisition or retention because of visa or work restrictions — either losing employees, seeing less talent available, or in hiring more local talent.

Although nearly 66% of all participants surveyed say they have not experienced pressure to change their approach to innovation in their headquarters country to date, 23% say they have already experienced such pressure in another country.

Almost 50% of the companies in North America plan to make changes to their R&D programs over the next two years in response to the changing political environment.

Survey participants believed US, UK, and China could be most at risk from potential changes in policy that could impact R&D investment. Both the US and UK’s talent flow could be at risk of potential disruption while China’s decline in corporate

R&D spending and reliance on R&D investment from abroad could be at risk.  

Canada, Germany, and France are likely to gain if protectionist policies broadly become a reality.

“It’s been a year of highs and lows for R&D. Record levels of investment, next to unprecedented drops in alignment between innovation and business strategies. There’s no doubt that uncertainty is causing concern for medium and long term plans, irrespective of whether policy realities actually  follow political rhetoric.” comments Barry Jaruzelski, Principal, PwC US, Strategy&

“Although the goals and levels of investment in corporate innovation will likely not change if economic nationalism continues to develop, the global innovation model would need to evolve. At many companies, what is now a nimble, interdependent network may become a group of more autonomous hubs, hiring specialist technical talent in local regional markets and opening future R&D centers in regional markets. It could mean companies losing efficiency and taking on higher costs if it is not managed effectively.” Commented Jaruzelski.

 



 





Week's News



Comments From Our Members

You must be an ABL Advisor member to post comments. Login or Join Now.