Will Stronger Borders Weaken Innovation?
Like it or not, economic nationalism – as expressed in the rhetoric of some political leaders – is a growing global phenomenon to be reckoned with. Multinational companies are concerned that it will translate into – and in some cases already has translated into - policies with the potential to disrupt their businesses. In particular, they are worried about the effect on their global research and development (R&D) networks.
In the latest Strategy& Global Innovation 1,000 study a majority of respondents said a continued trend toward economic nationalism would have a significant or moderate effect on their R&D operations.
The phenomenon is already having an effect on companies’ ability to recruit and attract into certain countries key research and development talent. In the UK, there is clear evidence that the trend is starting to make it harder for some companies to attract R&D talent from overseas.
The study reveals that there has been a drop in applications from international students for science and engineering programmes (both undergraduate and graduate degree level) in the UK.
According to our survey, the UK is viewed as the second most vulnerable country after the United States, and our respondents expressed concerns that weaker R&D programs in the UK could have a ripple effect across the region. Europe as a whole might become weaker compared to Asia and the Americas. Our 2015 analysis of global innovation flows revealed that between 2007 and 2015, R&D spending in Europe had fallen from first place among regions to third, after Asia and the Americas.
52% of survey respondents said economic nationalism will have a moderate or significant impact on R&D.
Survey reveals the UK is one of the top 3 countries at risk if there is a move towards #economicnationalism.
Today’s integrated and interdependent networks will most likely be replaced with autonomous R&D nodes.
R&D spending among the world’s 1000 largest corporate R&D spenders increased 3.2% in 2017 to £523.6 billion.
The Global Innovation 1000 study analyses spending at the world's 1000 largest publicly listed corporate R&D spenders. The chart below lists the Top 20 largest corporate R&D spenders headquartered in the UK.
2017 Rank in Britain |
2016 Rank in Britain |
2017 Rank in the Global Innovation 1000 |
Company | Industry | 2017 R&D Expenditures (in GBP Billions) |
2017 Revenue (in GBP Billions) |
2017 R&D Intensity |
---|---|---|---|---|---|---|---|
1 | 1 | 21 | AstraZeneca PLC | Healthcare | 4.77 | 18.63 | 25.6% |
2 | 2 | 35 | GlaxoSmithKline plc | Healthcare | 3.63 | 27.89 | 13.0% |
3 | 3 | 44 | Fiat Chrysler Automobiles N.V. | Auto | 2.80 | 94.92 | 2.9% |
4 | 5 | 121 | Delphi Automotive PLC | Auto | 0.97 | 13.49 | 7.2% |
5 | 4 | 124 | Rolls-Royce Holdings plc | Aerospace and Defense | 0.92 | 14.96 | 6.1% |
6 | 8 | 167 | CNH Industrial N.V. | Industrials | 0.70 | 19.17 | 3.6% |
7 | 7 | 182 | BT Group plc | Telecom | 0.64 | 24.06 | 2.7% |
8 | NEWN/A | 288 | Travelport Worldwide Limited | Software and Internet | 0.35 | 1.90 | 18.5% |
9 | 10 | 304 | BP p.l.c. | Chemicals and Energy | 0.32 | 147.93 | 0.2% |
10 | 12 | 432 | Micro Focus International plc | Software and Internet | 0.19 | 0.85 | 22.4% |
11 | 13 | 439 | BAE Systems plc | Aerospace and Defense | 0.21 | 17.79 | 1.2% |
12 | 17 | 457 | Dialog Semiconductor Plc | Computing and Electronics | 0.20 | 0.97 | 20.2% |
13 | 11 | 466 | Johnson Matthey Plc | Chemicals and Energy | 0.19 | 12.03 | 1.6% |
14 | 18 | 480 | Smith & Nephew plc | Healthcare | 0.19 | 3.78 | 4.9% |
15 | 14 | 481 | GKN plc | Auto | 0.19 | 8.82 | 2.1% |
16 | NEWN/A | 514 | Atlassian Corporation Plc | Software and Internet | 0.16 | 0.34 | 45.6% |
17 | 19 | 568 | The Sage Group plc | Software and Internet | 0.14 | 1.57 | 92% |
18 | 20 | 577 | Reckitt Benckiser Group plc | Consumer | 0.15 | 9.89 | 1.5% |
19 | 15 | 590 | British American Tobacco p.l.c. | Consumer | 0.14 | 14.75 | 1.0% |
20 | NEWN/A | 638 | Cobham plc | Aerospace and Defense | 0.13 | 0.13 | 6.7% |
Source: Bloomberg data, Capital IQ data, Strategy& 2017 Global Innovation 1000 Study
Note: All figures are in US$ Billions
The Global Innovation 1000 study analyses spending at the world's 1000 largest publicly listed corporate R&D spenders. The interactive data tool below lists the Top 25 largest corporate R&D spenders from the years 2011-2017 worldwide. You can use the tool to filter by year, company name, country, and industry group to view R&D expenditures, Revenue, and R&D intensity (R&D expenditure as a percentage of Revenue). In order to see the complete list of Top 1000 corporate R&D spenders from the years 2011-2017 see the "Download the Data" section. Click here for the methodology.
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Strategy&’s 2017 Global Innovation 1000 study Methodology