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Research and Development: The Three Biggest Spenders

We look at the companies which have spent the most in 2015

31Dec

Many have been quick to rubbish the correlation between R+D spending and innovation. For example, PWC's calculation of the world's top 10 most innovative companies bares little resemblance to that that of the top spenders.

Elon Musk's Tesla Motors was ranked the third most innovative company. They spent under a billion on R+D, while Volkswagen - which invested the most in R+D throughout 2015 - was nowhere near the top 10.

Let's look at the top spenders and what they've been doing with their investment.

Volkswagen

Volkswagen spent $15.3 billion on R+D in 2015 - a billion more than Samsung, its nearest rival.

It's been a traumatic year for VW, with the company still amid a worldwide controversy following the emissions scandal affecting around 11 million cars.

The scandal is set to impact the company's R+D budget, with $1 billion expected to be cut. The reduction in capital spending will apply to all divisions except critical models and alternative vehicles, like electronic and self-driving cars.

Much of the automotive organization's research has been spent on catching up with company's like Tesla and Ford, which have made real inroads into the industry. Next year, however, might see the company drop off this list.

Samsung

The South Korean giant invested $14.1 billion in R+D this year.

The department consists of 50,000 researchers and 42 global facilities, focusing on their own specific areas. For example, the Samsung Electronics Research Institute works on new mobile phones and digital TV software.

The amount the company spends on R+D, however, has caused financial worries. Coupled with slower sales, the organization's costs rose by 28%.

Much of the money has been spent on rejuvenating their mobile division, which although recently showing signs of recovery, has been suffering from new entrants.

Intel

Intel just pipped Microsoft to third place, spending $100 million more than the software giant.

The total invested was 11.5 billion in 2015, accounting for around 20% as a percentage of their total revenue - a ratio considerably higher than the other two companies mentioned on the list.

The level of spending is a reflection of the company's desire to keep up with Moore's law, the observation that computing power doubles each year.

In an article on Fortune, it states: 'One recent example of the company’s R&D efforts includes the 14nm Intel Core M processor, which is half the size of the previous generation of chips with 20% longer battery life and 60% less energy expenditure.'

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