Last Updated: June 18, 2020
The global spending on R&D has reached an all-time high at over $1.7 trillion.
Who are the biggest R&D spenders in 2020?
We have more mindblowing R&D statistics coming right up:
Fascinating R&D Facts and Stats (Editor’s Choice):
- South Korea and Israel are the biggest R&D spenders worldwide, spending 4.6% of their GDP on it.
- The US spent $581 billion in R&D in 2018.
- The US invested a total of $194.2 billion on medical and health R&D.
- The top 5 technology companies spent $76 billion on R&D in 2018.
- Worldwide pharmaceutical R&D spending in 2017 spiked to $165 billion, showing a rise of 3.5%.
- Tesla R&D spending in 2018 was $1.5 billion.
- Amazon R&D spending was $28.8 billion.
- Apple Inc. spent $14.2 billion on R&D spending in 2018
What’s more, just 10 countries are responsible for 80% of the world’s research and development spending. By 2030, more countries have pledged to increase their R&D budgets, efforts, and researchers to create innovative products and services that connect with their customers.
Statistics on Top R&D Spenders
1. South Korea and Israel are the biggest R&D spenders worldwide.
According to the latest R&D statistics available, South Korea and Israel are the two biggest spenders when it comes to research and development. The two countries remain head-to-head, spending 4.6% of their GDP on R&D in 2017. However, in terms of the most dollars being spent, the United States remains the biggest spender of R&D, followed by China and Japan.
2. Amazon is at the top of the list of the 10 biggest R&D spenders worldwide.
The majority of the R&D spending in the world is done in the computer and electronics sector. According to the latest R&D expenditure stats, on top of companies with the highest spending on research is Amazon with R&D expenditure at $28.8 billion dollars in 2019. Google’s parent company Alphabet, comes second with $26 billion in 2019.
- Samsung – $16.73 billion
- Huawei – $15.30 billion
- Microsoft – $14.7% billion
- Volkswagen – $14.3 billion
- Apple – $14.2 billion
- Intel – $13.5
- Roche – $11.4
- Johnson and Johnson – $10.8 billion in 2018
3. Top 1000 companies accounted for 40% of all research and development spendings.
The top 1000 companies spent a total of $858 billion on research and development efforts in 2018. This amounts accounts for approximately 40% of the R&D spending in the world. So the total R&D spending around the world was in the region of $2 trillion in 2018.
4. The business sector comes in at No. 1 in the list of top sources of R&D funding.
According to the most recent reports on R&D funding, the business sector accounts for $267.3 billion of funding. That’s approx. 63% of the United States’ total R&D performance. The second largest source is the federal government. It accounts for $125.7 billion or 30% of the US’s R&D. The fund was granted to federal, academic and business performers but some non-profits also benefitted from it. Apporx. $15.1 billion or 4% was from non-profits to fund their own organization’s R&D efforts. $12.5 billion or 3% of R&D fund was done by the academic sector for their own research. $3.8 billion or 1% was from local or state government that supported academic research.
Global R&D Spending
5. The US spent $581 billion in R&D.
The answer to how much the US spends on R&D is $581 billion in 2019, the most recent year for which data is available.
The sheer dollar amount places it at the head of the pack.
6. The US spent 2.8% of its GDP on R&D
Although the US may top the list in terms of dollar amount, when it comes to R&D expenditure, it actually spends only 2.8% of its GDP on the efforts.
Canada came in second in North America with 1.6% of GDP.
The highest R&D percentage is spent by South Korea and Israel.
7. The US leads R&D spending by countries, 2019
(Source: Statista, UNESCO)
According to Statista’s latest data, the United States spent 581 billion in R&D in 2018. UNESCO’S R&D spending statistics of other countries revealed that:
- China spent $496 billion
- Japan spent $175.8 billion
- Germany spent $127.1 billion
- The Republic of Korea spent $89.8 billion
- France spent $62.9 billion
8. US spent $194.2 billion on medical research spending
According to medical research spending by country, the US invested a total of $194.2 billion on medical and health R&D from 2017 to 2018. Out of that, the industry invested 66.7% billion in medical R&D. Federal agencies invested 22.2%. Academic and research institutions invested 8.1%, foundations invested 1.2%, state, and local governments invested 1.1%, and non-profits invested 0.8%.
What Industry Spends The Most On Research and Development?
9. The pharmaceutical industry has the most R&D spending as a percentage of revenue globally.
According to the data of 2,500 companies in the US, EU, Japan, China, and other countries, the pharmaceutical and biotechnology industry spends 15% of its revenue in R&D. Software and computer services spend 10.6% of its revenue on R&D. The technology hardware and equipment industry spends 8.4% of its revenue on R&D. The automobile and parts industry spends 5.9% of its revenue on R&D. The chemical industry spends 2.9% of its revenue on R&D, and the aerospace and defense industry spends 2.8% of its revenue in R&D.
10. The average US R&D spending by industry of the S&P 100 is highest in the healthcare sector.
According to data mined from 57 out of the 100 S&P 100 companies, the sector that spends the most on research and development is health at 16%. This is followed by tech, media, and telecommunication at 13%, consumer discretionary at 11%, industrial, energy, and materials at 3%, and consumer staples at 3%.
11. The top 5 technology companies collectively spent $76 billion.
The answer to how much do tech companies spend on R&D can be given by the following. According to the latest data, the top 5 technology companies spent $76 billion on R&D in 2018.
Amazon topped the list with $22.6 billion, a 41% increase compared to the previous year.
12. Global pharma R&D spending surged by 3.9%.
According to R&D reports, worldwide pharmaceutical R&D spending in 2017 spiked to $165 billion. That’s a rise of 3.5%.
The top 20 pharma giants spent a total of $97.2 billion, which Roche coming out on top with $9.2 billion worth of investment in R&D. Interestingly, R&D spending in the United States remained constantly higher than R&D spending in other countries of the world, including the UK.
13. AstraZeneca tops the list of the biggest R&D spenders in pharma with 25.63% of revenue spent on R&D.
In 2019, pharmaceutical companies spent about 20% of their revenue on research and development efforts. As of June 2019:
- AstraZeneca spent 25.63%
- Eli Lilly spent 22.38%
- Roche spent 21.29%
- Merck spent 19.70%
- Biogen spent 15.41%
Smaller companies have lower revenue so they often end up spending a much higher percent — sometimes as much as 50% — on research and development.
14. Roche had an $11.06 billion R&D budget in 2018.
(Source: Fierce Biotech)
In 2018, the top 15 big pharmas spent over $100 billion on drug R&D efforts. The pharma companies with R$D budgets that lead the pack are:
- Roche with a budget at $11.06 billion
- Johnson & Johnson with a budget of 10.8 billion
- Merck with a budget of $9.75 billion
- Novartis with a budget of $9.07 billion
- Pfizer with a budget slightly over $8 billion
- Sanofi with a budget of $6.97 billion
- Bristol-Myers Squibb with a budget of $6.34 billion
- Astra-Zeneca with a budget of $5.93 billion
- Eli Lilly with a budget of $5.307 billion
- GlaxoSmithKline with a budget of $5.19 billion
R&D Spending by the Company
15. Tesla R&D spending in 2018 was $1.5 billion.
Tesla is currently the leading company for electric vehicle sales. Thanks to its $1.5 billion R&D spending in 2018 it has successfully trapped the luxury car market. The amount is nearly double that of 2016. Because of that, it’s the US’s leading electric vehicle company.
16. Amazon R&D spending was $28.8 billion.
In 2018, Amazon spent the most amount of its revenue on research and development, bringing the total up to a whopping $28.8 billion. The investment paid off making founder and CEO Jeff Bezos the wealthiest person in the world.
17. Alphabet R&D spending was $26 billion.
According to the latest data, Google’s parent company, Alphabet, spent 26.018 billion dollars in 2019 for R&D efforts. This is remarkable growth!
In 2013 its spending was just over $7 billion.
18. Apple R&D spending rose to $14.2 billion.
(Source: Business Insider)
Apple Inc. spent $14.2 billion on R&D spending in 2018. The amount is more than what Apple earned 15 years ago and about 18 times more than what it spent in the year the iPhone was first launched.
19. Pfizer R&D spending is over $8 billion.
Pfizer is one of the world’s largest pharma companies and in 2018, invested over 8 billion dollars in R&D. This is an increase from previous years.
However, it is a decrease from 2010 when the company spent $9.5 billion on R&D efforts.
Trends in R&D Spending
20. AI R&D spending is expected to increase to $97.9 billion.
(Source: International Data Corporation)
R&D spending on artificial intelligence is expected to expand from the current $37.5 billion to $97.9 billion and will show a compound annual growth rate of 28.4% between fiscal years 2018 to 2023. The global retail industry will invest $5.9 billion on AI, followed by banking which will invest $5.6 billion as well as discrete manufacturing, health care industry, and process manufacturing.
21. The average SaaS companies R&D spending is 23%.
(Source: Opex Engine)
According to 2018 R&D data, SaaS companies spent an average of 23% of their revenue on research and development efforts. The latest IPOs in 2018 and 2019 spent a little more at 28% and their median level of revenue was $108 million, so this means the R&D expenditure was a little over $30 million.
22. Most firms now spend more on R&D than advertising.
(Source: Harvard Business Review)
According to the data on R&D spending vs advertising spending, firms spent over 15 of their total revenue on advertising till 1980s.
However, the percentage of advertising expenditures has lowered to 0.8% in recent years. During this time, the percentage of R&D revenue has increased from 1% to 7% of the firms’ total expenses.
Most of the firms with a higher percentage of R&D expenditure were in the biotechnology or the internet fields. Retail firms continue to spend 2% to 3% on advertising expenditure without showing much increase in innovation efforts. In contrast, the manufacturing industry now spends 5% of their revenue of R&D.
Technology firms show the most dramatic change and spend over 10% more on R&D and less than 1% on advertising.
R&D gets the world turning.
So we can say it’s pretty important.
To understand a country’s commitment to innovation and R&D all you need to do is to find out how much money it spends on R&D efforts as a percentage of its GDP. The more companies dedicated to innovation and research, a country has, the better the chances of prosperity.
Our R&D statistics today were an eye-opener.
See you around on SpendMeNot, guys.