UK companies invested £16.5 billion in research and development in the last fiscal year (ending June 2016), accounting for 4% of the global total (£446 billion) and ranking as the eighth highest investment by country.
The healthcare industry is leading the way in the UK, investing nearly half (48%) of total R&D spend. This is according to the 2016 Global Innovation 1000 Study published today [25 October 2016] by Strategy&, PwC’s strategy consulting business. The automotive and consumer industries complete the top three for R&D spending by UK companies, investing 18% and 8% of the total respectively.
Germany is currently the leading market in Europe by R&D spend, representing double the investment of the UK at 8%, ranking third globally after the United State (43%) and Japan (15%).
37 UK-headquartered companies made the Innovation 1000 list this year, spending on average 2.9% of revenue on R&D, up slightly from 2.3% the year before, but considerably lower than the global average of 4.2%.
Mark Couttie, Strategy& partner in London, commented:
“Innovation is an essential component of competitive advantage and UK business leaders clearly recognise the importance of R&D to their future success. Brexit has only made R&D investment more pertinent in the UK. It’s vital that companies continue investing and remain agile to exploit new opportunities. To do this they need to ensure they have the right talent in place, invest in ambitious innovation models, and employ a strategic approach to M&A to help build the capabilities they will need to thrive.”
The Top 10 UK R&D spenders
Key global trends
Mark Couttie continued:
“Regardless of industry, companies around the world are aiming to ensure competitive advantage by focusing on software investment, staying agile, and via ongoing testing and innovation.
“The software investment trend in particular will have huge implications for business strategies and future investment decisions across all industries, affecting everything from the talent they look to hire in the future, to the innovation models they pursue, and even the flow of where R&D is done across the world.”
The 10 Most Innovative Companies vs. Top 10 R&D Spenders globally
Notes for editors.
About the 2016 Global Innovation 1000 Study
For more information please visit http://www.strategyand.pwc.com/innovation1000. A copy of the study findings by geography and industry are available from the media contact. Additional multi-media assets including infographics and video are also available.
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