2017 R&D Spending Increases Within Digital Economy

 
LIBERTYVILLE, Ill. - June 15, 2016 - PRLog -- According to a newly released study, R&D Ratios & Budgets, now in its 40th annual edition, from Schonfeld & Associates, Inc., research and development spending in 2017 is growing robustly in firms within the digital economy. Spending by all U.S. headquartered firms will grow by 5.5% while non-U.S. headquartered firms will shrink their R&D budgets by 1.9%. R&D intensity, as expressed by the R&D-to-sales ratio, is 5.2% for U.S. headquartered firms versus 3.5% 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 $92 billion. Automotive companies will continue to contribute a total of $62 billion to this investment pool.

Software companies are projected to increase R&D spending by 5.7% and to see sales increase over 5%. Of the major software companies,Microsoft leads with a budget of $13.9 billion, an increase of 6%.  Oracle is investing over $6.7 billion and SAP $2.9 billion in 2017. Alphabet, parent of Google, joined by Amazon, Apple and Facebook, whose software is not available for purchase, each plan to invest over $7 billion in 2017, reflecting double digit increases in spending. These findings continue the trend reported in previous editions of R&D Ratios & Budgets.

The biggest single R&D investor in 2017 will be Amazon at over $17 billion, followed by Alphabet at $15.8 billion, Microsoft at $13.9 and then Intel at $13.5 billion. Firms producing digital content are investing much more heavily than those in more traditional arenas.

Pharmaceutical firms will continue significant R&D spending in 2017. Roche, the top spender at $10.1 billion, is followed by Johnson & Johnson, Novartis, Pfizer, Merck, Astrazeneca, Bristol-Myers Squibb and AbbVie, 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 12% to over $25 billion. Electromedical apparatus makers, led by Medtronic, will be spending a total of over $5.3 billion, a boost of 3.9 percent.

R&D budgets of semiconductor makers will grow to just over $45 billion, an increase of 5.1%. Intel will have the largest R&D budget, $13.5 billion, up over 5 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 $12 billion, a decrease of 5%.

The automotive industry is increasing its total R&D spending slightly to over $62 billion. The spending of major players varies from a double digit increase by Tesla to a 7.8% decrease by Nissan.

These forecasts come from the 40th annual edition of R&D Ratios & Budgets by Schonfeld & Associates.  The study contains historical R&D spending for 2015, an estimate of R&D budgets for 2016, and a forecast of 2017 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 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 270 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 2016 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 http://www.saiBooks.com under Area of Expertise: Research & Development Spending.

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Carol J Greenhut
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Tags:R&D spending, R&D intensity, R&D budget
Industry:Business
Location:Libertyville - Illinois - United States
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