NEW YORK: Roche and Pfizer, the pharma groups, spent more on R&D than any other brand owners in 2010, but Apple and Google, the tech giants, are seen as the most successful firms in this area.
Booz & Co, the consultancy, reported that Roche logged an outlay of $9.6bn, or 21.1% of sales, on R&D last year. These figures stood at $9.4bn and 13.9% in turn for Pfizer, while Novartis also posted $9.1bn and 17.1% respectively.
Microsoft, the IT specialist, was the only leading player outside the pharma market, allocating $8.7bn to this discipline, 14% of its returns. It came ahead of Merck on $8.6bn, or 18.7% of sales.
By contrast, a poll of 525 executives by Booz found Apple was perceived to be the most innovative company, despite spending just $1.8bn, or 2.7%, of revenues, on R&D. Google claimed second place, having invested $3.8bn, or 12.8% of sales.
Similarly, 3M, in third, registered an outlay of $1.4bn, a modest 6.4% of returns. Equally, GE's R&D outgoings were $3.9bn, or 2.6% of sales. Microsoft was in fifth in this vote, the first corporation to feature on both lists.
According to Booz & Co, total R&D expenditure reached $1.15tr worldwide in 2010, with the top 1,000 companies responsible for $550bn, a 9.3% lift, and the next 1,000 firms on $38bn.
This followed on from the 3.5% decline recorded in 2009, when the 1,000 organisations with the highest spending directed a combined $503bn to innovation.
By sector, the computing and electronics segment yielded 28% of expenditure last year, with healthcare on 22%, automotive on 15% and industrials on 15%. Elsewhere, the software and internet category was on 6%.
In all, 68% of the top 1,000 heightened their investment, 25% cut back and 7% saw no change. Operators from India and China boosted funding by 38%, with North America up 10.5%, Europe by 5.8% and Japan by 1.8%.
"Clearly, 2010's R&D increases confirm a continued commitment to invest in new and improved products and services in ever-more competitive markets around the world. However, much of the R&D growth represents catch-up rather than higher levels of new investment," said Barry Jaruzelski, of Booz & Co.
Booz named Apple, Xerox and Stanley Black & Decker among the "need seekers" striving to be first movers on innovation, whereas Samsung and Visteon tended to be "market readers" favouring incremental change.
Google and Siemens were examples of "tech drivers", which use technology for incremental and breakthrough innovations but are also the "least proactive" of the three core groups when it comes to directly contacting customers.
Over 50% of companies surveyed by Booz & Co said their R&D and business strategies were not aligned, falling to 27% for "need seekers", versus 73% for "market readers" and 63% for "tech drivers".
Data sourced from Booz & Co; additional content by Warc staff