Growth Continues for R&D Spending into 2016

LIBERTYVILLE, Ill. - June 15, 2015 - PRLog -- According to a newly released study, R&D Ratios & Budgets, now in its 39th annual edition, from Schonfeld & Associates, Inc., research and development spending in 2016 continues to grow modestly within most industries. Spending by U.S. headquartered firms will grow by 6.4% while non-U.S. headquartered firms will grow their R&D budgets by only 0.4%. R&D intensity, as expressed by the R&D-to-sales ratio, is 4.4% for U.S. headquartered firms versus 2.8% for non-U.S. headquartered companies.

The pharmaceutical industry continues to be the biggest R&D investor with drug companies increasing their budgets slightly to spend over $91 billion. Automotive companies will add $66 billion to this investment pool, an increase of 3.8%.

Software companies are projected to increase R&D spending by 6.5% and to see sales increase just under 7%. Of the major software companies,Microsoft leads with a budget of $13.2 billion, an increase of 6.3%.  Oracle is investing over $5.8 billion and SAP $2.9 billion in 2016. Google, joined by Amazon, Ebay and Facebook, whose software is not available for purchase, all plan to invest over $2 billion in 2016. These findings continue the trend reported in previous editions of R&D Ratios & Budgets.

The biggest single R&D investor in 2016 will be Volkswagen at over $17 billion, followed by Microsoft at over $13 billion.

Pharmaceutical firms will continue significant R&D spending in 2016. Roche, the top spender at $10.2 billion, is followed by Johnson & Johnson, Novartis, Pfizer, Merck, Astrazeneca and Sanofi, each projected to spend over $5 billion. Much of this investment is spurred by new discoveries and attempts to protect expiring patents. The biotech industry is growing R&D by over 13% to over $18 billion. Electromedical apparatus makers, led by Medtronic, will be spending over $5.2 billion, a boost of 3.8 percent.

R&D budgets of semiconductor makers will grow to just under $50 billion, an increase of 6.6%. Intel will have the largest R&D budget, $13.5 billion, up over 8 percent. R&D budgets of the industries that are major suppliers to the infrastructure of the Internet cloud, such as Electronic Computers and Computer Communications Equipment as well as other related industries, such as Computer Storage Devices are also expected to increase R&D spending. Telecommunications companies worldwide will invest over $17 billion, a slight decrease.

The automotive industry has continued its rebound with sales to rise a bit over 1 percent and is increasing its total R&D spending by 3.8% to over $66 billion with most major players increasing spending except for modest decreases by GM, Honda, Nissan and Toyota.

These forecasts come from the 39th annual edition of R&D Ratios & Budgets by Schonfeld & Associates.  The study contains historical R&D spending for 2014, an estimate of R&D budgets for 2015, and a forecast of 2016 R&D spending for over 4,400 firms.

R&D Ratios & Budgets is used for budget planning, monitoring competition, identifying joint venture partners, and spotting acquisition candidates. Regular buyers are in a wide range of industries and include major national and international firms, government agencies, corporate libraries and universities.

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 280 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 2015 edition of the report in either print or PDF format is $ 395 and the report along with Excel datafiles is $ 495. Contact Schonfeld & Associates, Inc., 1931 Lynn Circle, Libertyville, Illinois 60048. Call for more information: 800-205-0030 or visit the company’s web site at under Area of Expertise: Research & Development Spending.

Carol Greenhut
Schonfeld & Associates, Inc. PRs
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