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Continuing growth in R&D spending forecast for 2014
The pharmaceutical industry continues to be the biggest R&D investor with drug companies increasing their budgets by nearly 4% to spend over $102 billion. Automotive companies will add $72 billion to this investment pool, an increase of 7.3%.
Software companies are projected to increase R&D spending by 8% and to see sales increase over 9%. Of the major software companies, Microsoft leads with a budget of $11 billion, an increase of 4.7%. Oracle and SAP are both also investing over $3 billion in 2014. Google, joined by Amazon and Ebay whose software is not available for purchase, all plan to invest over $2 billion in 2014. These findings were foreshadowed by last year's edition of R&D Ratios & Budgets.
The biggest single R&D investor in 2014 will be Volkswagen at over $14 billion, followed by Intel at over $13 billion.
Pharmaceutical firms will continue robust R&D spending in 2014. Novartis, the top spender at $10.8 billion is followed by Roche, Johnson & Johnson, Merck, Sanofi, Pfizer, GlaxoSmithKline, Abbott, Eli Lilly and Astrazeneca, each projected to spend over $5 billion. Overall R&D growth in pharmaceuticals is estimated at 3.9 percent in 2014, much of this investment spurred by new discoveries and attempts to protect expiring patents. The biotech industry is growing R&D by 8.2% to just over $12 billion. Electromedical apparatus makers, led by Medtronic, will be spending over $4.7 billion, a boost of 6 percent.
R&D budgets of semiconductor makers will grow to $48.6 billion, an increase of 9%. Intel will have the largest R&D budget, $13.1 billion, up over 13 percent. R&D budgets of the industries that are major users of chips, such as Electronic Computers and Computer Communications Equipment as well as other related industries, such as Computer Storage Devices and Computer Peripheral Equipment are also expected to increase R&D spending. Telecommunications companies worldwide will invest over $20 billion, an increase of over 6%
The automotive industry has rebounded with sales to rise over 7 percent and is increasing its R&D spending by 7.3% to over $72 billion with all the major players increasing spending.
About the Study
These predictions come from the 37th annual edition of R&D Ratios & Budgets by Schonfeld & Associates. The study contains historical R&D spending for 2012, an estimate of R&D budgets for 2013, and a forecast of 2014 R&D spending for over 4,000 firms.
R&D Ratios & Budgets is used for budget planning, monitoring competition, identifying joint venture partners, and spotting acquisition candidates. Regular buyers include: IBM, HP, GM, Boeing, Unilever, GlaxoSmithKline, libraries, government agencies and others.
The study shows each firm's R&D-to-gross profits ratio, R&D-to-sales ratio also referred to as R&D intensity, plus R&D and sales growth rates. In addition, for each company and industry, the study contains a low and high range for each ratio over the last six years to indicate stability of R&D spending. It also contains over 290 industry summaries.
Forecasts and data from R&D Ratios & Budgets are also available for all companies and industries in Excel format. Additional information is provided within the datafiles to allow for analysis by corporate location or NAICS code. The printed 2013 edition is $ 395 and the book with Excel datafiles is $ 495. Contact Schonfeld & Associates, Inc., 1931 Lynn Circle, Libertyville, Illinois 60048. Call for more information: