IT tops R&D spend

The IT hardware, software and telecoms sectors spent a total of $102bn on R&D internationally in 2003 - more than any other one business area, according to the UK Department of Trade and Industry's annual 2004 R&D Scoreboard.

The scoreboard, released today, reveals IT hardware accounts for the largest share of R&D spend internationally, with 20 per cent, despite falling 6 per cent from 2002 to 2003. Meanwhile software and services R&D spend is up 8 per cent and telecoms grew 2 per cent.

The next closest sectors behind IT hardware are automotive with 19 per cent and pharmaceuticals/biotechnology with 18 per cent.

As for individual companies, Nokia and IBM were the top spenders on research and development with investments of $5bn each. They are followed by Microsoft ($4.6bn), Intel ($4.3bn) and Ericsson ($4bn).

When it comes to R&D 'intensity' - or the percentage R&D makes up of sales - lesser-known names crop up. In the IT space, chip maker Broadcom comes in first with 40.1 per cent, followed by Comverse Technology 31.3 per cent and Cadence Design Systems first with 30.4 per cent.

The US and Japan are the leading countries for R&D spend across all sectors - with $73.8bn and $45.6bn, respectively - as well as in electronics and IT. The UK's total spend is $10.6bn.

While both the US and Japan pay out around 40 per cent each of their total on electronics and IT, the UK weighs in with less than 10 per cent.

In the UK, the sectors spending most on R&D are pharmaceuticals/biotechnology (39 per cent) and aerospace/defence (12 per cent).

Total R&D investment in the UK is up just 1 per cent over last year and 5 per cent over the last four years. The most improvement - a 66 per cent rise from 1999 to 2003 - was seen in the number of UK companies with over £25m sales and 4 per cent R&D intensity.

Investing in R&D may help grow a company's sales, according to analysis of the scoreboard provided by the DTI. Over the past four years, the analysis showed, companies that spent heavily on R&D also tended to see significant revenue increases.

The top three spenders overall on R&D globally in 2003 were Ford (on $7.5bn), Pfizer ($7.1bn) and DaimlerChrsyler ($7.0bn). Number one in the UK was GlaxoSmithkline on $5.0bn.