Innovation: World's Largest R&D Investors Are Volkswagen and Samsung as of 2012

German carmaker Volkswagen is the world’s largest private sector Research & Development investor with an investment of €9.5bn in 2012, according to the European Commission's 2013 EU Industrial R&D Investment Scoreboard.

Overall, EU-based firms (527 companies) stepped up R&D investment by 6.3%, just above the average of the 2000 firms in the Scoreboard (+6.2%). EU Scoreboard companies surveyed expect to increase their R&D investments by 2.6 % on average per year for the period 2013-2015, a fall in expectations over the previous year.

The 6.2% increase on average in R&D growth of the Scoreboard companies came despite a slowdown of net sales growth (+4.2% vs +9.9% in 2011) and a 10.1% decline in operating profits in 2012. The EU's overall positive results were largely driven by the R&D growth rates of German companies, particularly in the automobile sector.

Second place in the ranking goes to Samsung Electronics from South Korea with an investment of €8.3bn. Other companies in the top-10 include five based in the US (Microsoft, Intel, Merck, Johnson & Johnson and Pfizer), two in Switzerland (Roche and Novartis) and one in Japan (Toyota).

EU based companies in the Automobiles & Parts sector showed strong R&D growth (+14.4% vs -2.6% for their US counterparts). EU companies also outperformed US ones in Industrial Engineering (+12.3% vs +9.4%) and Aerospace & Defence (+9.5% vs -1.3%). Results of EU companies in the ICT sector were mixed, with Software and Computer Services performing well (+14.2%) but showing a decline in IT Hardware (-2.3%). In contrast, US-based companies performed well across both sectors (+12.6% and +14.8% respectively).

An analysis of trends over the last 10 years shows that the US continue to increase its specialisation in R&D intensive sectors such as ICT and health (70% share of the total R&D investments made by US Scoreboard companies in 2012 vs 64 % in 2004).

Despite the strong US lead in these highly R&D intensive sectors, a closer look at the lower ranks of the EU companies shows a significant number of good performers in sectors such as Software and Biotech, companies which might become leaders in the future.