Global R&D BenchmarkingDecember , 2010This report is solely for the use of Zinnov client and Zinnov personnel. No part of ...
Global R&D spending has declined/ decreased; however, this decline is much lower than the    decline in net sales, indicat...
The Top 500 R&D spenders account for close to 90% of the total corporate R&D spending in   the world; only three of the to...
North America (NA) and Europe (EU) account for the majority of investments, but   considering the PPP conversion, APAC con...
Companies in the APAC region continued to increase their R&D investments against the   prevailing trend of reducing R&D sp...
This presentation will be focused towards the highlighted verticals below, which account for   more than 63% of the total ...
However, almost all verticals witnessed a decrease in absolute R&D investments with   Automotive, Semiconductors and Telec...
During the recent economic downturn companies in most verticals continued to spend the   similar percentage of revenue on ...
North American companies are the largest contributor towards software product/ internet   R&D with Europe coming a distant...
Majority of the companies in the Industrial vertical are small/medium sized contributing   aggressively towards R&D invest...
North America accounts for more than 65% of total R&D spend in Semiconductor vertical   with significant contribution from...
Consumer Electronics/ Computer Hardware companies are majorly concentrated in the   Japan and Asia-Pacific region         ...
Telecom & Networking vertical witnesses significant contributions from all sizes of the   companies, though mainly in Nort...
North America and Europe completely dominate R&D spending in the Aerospace & Defense   vertical with contribution from sma...
Japanese and European corporations account for more than 80% of the R&D spending in the   Automotive vertical            D...
Thank You                                                                                 @zinnov69 "Prathiba Complex", 4t...
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Global R&D Benchmarking 2010

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Global R&D Benchmarking 2010

  1. 1. Global R&D BenchmarkingDecember , 2010This report is solely for the use of Zinnov client and Zinnov personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from Zinnov
  2. 2. Global R&D spending has declined/ decreased; however, this decline is much lower than the decline in net sales, indicating the strategic importance of R&D Global R&D Investments Growth Trends, 2006-10 Global Net Sales Trends, 2006-10 (USD Billion) (USD Billion) 560 17,000 549 16,500 16,684 540 538 16,000 520 15,500 511 15,336 500 15,000 14,953 480 14,500 14,000 14,134 460 468 13,500 440 13,000 420 12,500 2006-07 2007-08 2008-09 2009-10 2006-07 2007-08 2008-09 2009-10  Companies like Nokia, Sony, Daimler, Panasonic and Robert Bosch, have only slightly reduced their R&D spending even though net sales has taken a big hit in the last year  Analysis of top R&D spenders across verticals reveals that in R&D spending in the latest quarter (Sep 2010) went up by an average of 11% compared to last yearSource: Zinnov analysis of global top 1000 R&D spenders 2
  3. 3. The Top 500 R&D spenders account for close to 90% of the total corporate R&D spending in the world; only three of the top 10 R&D spenders in 2009-10 were from North America Contribution of Top R&D Investors in the Total Company 2009-2010 2008-2009 2006-2007 Global 1,000 R&D Spend Name Rank Rank Rank Change Change Toyota Motor 1 0 0 Roche 2 +2 +6 35% Microsoft 3 -1 +3 30% 30.5% Volkswagen 4 -1 +6 30.3% Pfizer 5 -1 -3 25% Novartis 6 +4 +12 20% Nokia 7 0 +10 Johnson & 8 0 -3 15% Johnson 15.4% 9 +2 0 14.1% Sanofi-Aventis 10% Samsung 10 +5 +10 Electronics 9.7% 5% Siemens 11 +3 +5 General Motors 12 -7 -5 0% Honda Motor 13 0 +2 0-10 11-50 51-100 101-500 501-1000 Daimler 14 -2 -11 GlaxoSmithKline 15 +6 -1 Companies marked in Red have shown continuous decrease in rank in last four years. The Scenario is opposite for companiesSource: Zinnov analysis of global top 1000 R&D spenders marked in Green.
  4. 4. North America (NA) and Europe (EU) account for the majority of investments, but considering the PPP conversion, APAC contribution is significantly higher Split of Top 1000 Companies by Geography Split of R&D Investment of Top 1000 Companies by Geography ROW ROW ROW 2% 1.2% 2.8% APAC NA 10% 35% NA NA 34.7% 36.4% EU 33% Japan 20% Japan Japan 22.3% 17.0% PPP PPP PPP PPP Conversion Conversion Country (Local Conversion Country (Local Conversion EU (USD) (USD) Currency) Currency) EU 32.5% US 1.00 1.00 UK 0.65 1.08 35.5% Canada 1.23 1.17 Korea 872.00 0.76 France 0.93 1.38 China 4.09 ` 0.57 APAC APAC Germany 0.89 1.33 Japan 134.34 1.49 12.5% 6.2% Spain 0.79 1.18 India 16.54 0.36 w/o PPP At PPPNote: Average values have been taken for PPP analysisSource: Zinnov analysis of global top 1000 R&D spenders; UN Statistical Data on PPP Conversion 4
  5. 5. Companies in the APAC region continued to increase their R&D investments against the prevailing trend of reducing R&D spending followed by companies in other geographies R&D investments in year 2008-2009 and 2009-2010 split by Geography 250000 Arrow indicates whether R&D as a % of sales increased or decreased compared o last year` 2.1% 5.1% 200000 0.1% Sum of R&D 2008-2009 150000 Sum of R&D 2009-2010 100000 50000 13.2% 7.3% 0 APAC EU Japan NA OthersSource: Zinnov analysis of global top 1000 R&D spenders
  6. 6. This presentation will be focused towards the highlighted verticals below, which account for more than 63% of the total R&D investments in the top 1,000 list Vertical R&D Investment of Top 1,000 Split of Top 1000 Companies by Vertical Investors Telecom & Aerospace & USD 198.5 Networking Others Defense Computer Bn 36.9% 5.9% 3.3% Hardware/ Software/ Consumer Internet Electronics Automotive USD 86.5 Bn 16.1% Semiconduc 6.0% 5.4% tor Automotive Consumer 7.5% USD 59.4 Bn 11% 7.3% Electronics Industrial USD 58.8 Bn 10.9% Telecom & USD 46.8 Bn 8.7% Networking Industrial Software/Internet USD 38.4 Bn 7.1% 20.0% Others 44.6% Semiconductors USD 29.8 Bn 5.5% Aerospace & USD 20.2 Bn 3.8% Defense USD 538.5 Total BnNote: *Others include Pharmaceutical, Biotechnology, Media & Entertainment, Energy and othersSource: Zinnov analysis of global top 1000 R&D spenders 6
  7. 7. However, almost all verticals witnessed a decrease in absolute R&D investments with Automotive, Semiconductors and Telecom showing the maximum percentage decrease 120000 R&D investments in year 2009-2010 and 2008-2009 split by Vertical -11.6% 100000 R&D in 2008-2009 R&D in 2009-2010 80000 60000 -3.9% 40000 -7.4 % 20000 0 Aerospace & defence Automotive Computer Industrial Semiconductors Software/Internet Telecom & hardware/Consumer Networking ElectronicsSource: Zinnov analysis of global top 1000 R&D spenders
  8. 8. During the recent economic downturn companies in most verticals continued to spend the similar percentage of revenue on their R&D activities Total R&D Investments as Percentage of Net Sales (Top 1,000 R&D Spenders) , 2009 -2010 18.0% 1. Size of the Bubble Represents the relative 16.0% Semiconductors Total Net Sales of the Industry Vertical 2. Arrow indicates whether R&D as a % of 14.0% sales increased or decreased compared o last year 12.0% Software Percentage of Net Sales R&D Investments as 10.0% 8.0% Consumer Electronics / 6.0% Computer Hardware Automotive Aerospace & Defense Telecom & 4.0% Networking Industrial 2.0% 0.0% 0 10 20 30 40 50 60 70 80 90 100 Total Vertical R&D Investments (USD Billion)Source: Zinnov analysis of global top 1000 R&D spenders 8
  9. 9. North American companies are the largest contributor towards software product/ internet R&D with Europe coming a distant second Distribution of R&D Investments Top 1000 Companies in Distribution of Top 1000 Companies in Software Vertical by Software Vertical by Geography Geography and Revenue Ranges (USD) ROW APAC 0.4% EU 0.6% 11.6% 44 3 Arrows indicate the change in number of companies from year 2006-07 to 2009-10 8 7 NA 87.4% 29 12 1 Company Geography 2 2 Microsoft North America 11 3 2 IBM North America 3 2 Oracle North America Google North America NA EU APAC ROW SAP Europe 1 - 500 Mn 500 Mn - 1 Bn 1 - 10 Bn 10 Bn+Source: Zinnov analysis of global top 1000 R&D spenders 9
  10. 10. Majority of the companies in the Industrial vertical are small/medium sized contributing aggressively towards R&D investments; companies from APAC are on the rise in this vertical Distribution of R&D Investments Top 1000 Companies in Distribution of Top 1000 Companies in Industrial Vertical by Industrial Vertical by Geography Geography and Revenue Ranges (USD) ROW APAC 6.7% 79 6 Arrows indicate the 0.4% change in number of 3 companies from year NA 5 2006-07 to 2009-10 30.0% EU 9 4 40.2% 48 47 Japan 3 2 22.7% 6 6 71 7 23 39 39 Company Geography 2 Siemens Europe 23 3 General Electric North America Honeywell North America 3 Schneider Europe NA EU APAC Japan ROW Mitsubishi Heavy Japan 1 - 500 Mn 500 Mn - 1 Bn 1 - 10 BnSource: Zinnov analysis of global top 1000 R&D spenders 10
  11. 11. North America accounts for more than 65% of total R&D spend in Semiconductor vertical with significant contribution from APAC & EU geographies Distribution of R&D Investments Top 1000 Companies in Distribution of Top 1000 Companies in Semiconductor Vertical by Semiconductor Vertical by Geography Geography and Revenue Ranges (USD) ROW 3.0% 44 6 Arrows indicate the APAC change in number of 12.1% 4 companies from year EU 2006-07 12.9% 5 Japan 6.9% NA 65.1% 1 35 15 3 1 9 Company Geography 1 5 Intel North America 12 2 9 2 STMicroelectronics Europe 2 1 Advanced Micro Devices North America 1 1 Broadcom North America NA EU APAC Japan ROW Texas Instruments North America 1 - 500 Mn 500 Mn - 1 Bn 1 - 10 Bn 10 Bn+Source: Zinnov analysis of global top 1000 R&D spenders 11
  12. 12. Consumer Electronics/ Computer Hardware companies are majorly concentrated in the Japan and Asia-Pacific region Distribution of R&D Investments Top 1000 Companies in Distribution of Top 1000 Companies in Consumer Electronics/ Consumer Electronics/ Hardware Vertical by Geography Computer Hardware Vertical by Geography and Revenue Ranges (USD) ROW 0.0% 2.1% NA 17 APAC 12.7% 18.3% 2 Arrows indicate EU 14 the change in 1 number of 6.2% 12 companies from 2 9 year 2006-07 2 2 1 Japan 1 60.7% 8 1 6 10 9 3 7 Company Geography 1 Samsung Electronics APAC 2 2 Panasonic Japan Sony Japan NA EU APAC Japan ROW Hitachi Japan Toshiba Japan 1 - 500 Mn 500 Mn - 1 Bn 1 - 10 Bn 10 Bn+Source: Zinnov analysis of global top 1000 R&D spenders 12
  13. 13. Telecom & Networking vertical witnesses significant contributions from all sizes of the companies, though mainly in North America & Europe Distribution of R&D Investments Top 1000 Companies in Distribution of Top 1000 Companies in Telecom & Networking Telecom & Networking Vertical by Geography Vertical by Geography and Revenue Ranges (USD) 28 1 APAC Arrows indicate the change in 10.9% 3 number of companies from NA year 2006-07 to 2009-10 35.9% 1 4 20 EU 46.2% 7 Japan 2 6.9% 1 21 9 2 12 1 Company Geography 3 Nokia Europe 6 1 Cisco Systems North America 2 Alcatel-Lucent Europe NA EU APAC Japan Ericsson Europe 1 - 500 Mn 500 Mn - 1 Bn 1 - 10 Bn 10 Bn+ Motorola North AmericaSource: Zinnov analysis of global top 1000 R&D spenders 13
  14. 14. North America and Europe completely dominate R&D spending in the Aerospace & Defense vertical with contribution from small, medium and large sized companies Distribution of R&D Investments Top 1000 Companies in Distribution of Top 1000 Companies in Aerospace Vertical by Aerospace Vertical by Geography Geography and Revenue Ranges (USD) ROW 1.8% 15 15 3 Arrows indicate the 2 2 change in number of companies from year NA 2006-07 to 2009-10 43.5% EU 3 54.3% 4 Japan 0.4% 10 9 Company Geography 2 1 EADS Europe 2 Boeing NA 1 Finmeccanica Europe NA EU Japan ROW United Technologies NA Thales Europe 1 - 500 Mn 500 Mn - 1 Bn 1 - 10 Bn 10 Bn+Source: Zinnov analysis of global top 1000 R&D spenders 14
  15. 15. Japanese and European corporations account for more than 80% of the R&D spending in the Automotive vertical Distribution of R&D Investments Top 1000 Companies in Distribution of Top 1000 Companies in Automotive Vertical by Automotive Vertical by Geography Geography and Revenue Ranges (USD) ROW APAC 0.0% 0.1% NA 4.1% 26 1 14% Arrows indicate the 23 change in number of EU 6 companies from year 36.6% 2006-07 to 2009-10 2 9 3 Japan 15 45.2% 2 1 3 8 17 1 12 11 Company Geography 1 7 Toyota Motor Japan 1 Volkswagen Europe 1 General Motors NA NA EU Japan ROW APAC Honda Motors Japan Daimler Europe 1 - 500 Mn 500 Mn - 1 Bn 1 - 10 Bn 10 Bn+Source: Zinnov analysis of global top 1000 R&D spenders 15
  16. 16. Thank You @zinnov69 "Prathiba Complex", 4th A 575 N. Pastoria Ave 21, Waterway Ave,Cross, Koramangala Ind. Layout, Suite J Suite 3005th Block, Koramangala Sunnyvale The WoodlandsBangalore – 560095 CA – 94085 TX – 77380Phone: +91-80-41127925/6 Phone: +1-408-716-8432 Phone: +1-281-362-2773

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