Tech Talk | Research, development and innovation – who are leaders in energy?
Image: Iberdrola
Siemens … Electricite de France (EDF) … Iberdrola – all leaders in their respective energy categories for expenditure on R&D and innovation in Europe.
This is according to the EU’s ‘Industrial R&D Investment Scorecard’, which monitors the performance of the region’s leading industrial R&D investors against their global peers.
The 2024 edition, which covers data for 2023, has found that the top 2,000 global companies invested a total of €1.26 trillion (US$1.28 trillion) in R&D in 2023 – up almost 8% on the previous year, although down on the strong post-Covid growth of 13.8% in 2021 and 12.6% in 2022 – with the top 50 companies alone contributing 40% of this total.
Leading the ranking is the Google company Alphabet with almost €40 billion (US$40 billion), followed by other US tech giants Meta, Apple and Microsoft, and then in fifth position the first European company Volkswagen with almost €22 billion (US$23 billion).
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Others in the top ten are Hauwei, Samsung, Intel and the two pharmaceutical companies Roche and Johnson & Johnson.
The aim of the study, undertaken annually since 2004, is to benchmark trends against the EU’s 3% of GDP R&D investment policy target, which is considered a key performance indicator of the region’s long-term competitiveness.
The threshold for entering the scoreboard at rank 2,000 globally is €67 million (US$69 million).
Turning to Europe, with the listing of the top 800 EU companies, Volkswagen is joined by other auto manufacturers Mercedes-Benz, BMW, Bosch and Stellantis making up the top 5 and overall these and others make up half the top 20 – presumably driven by the development and production of electric vehicles.
Siemens in eighth place, tops the electronic and electrical equipment manufacturers with €6.2 billion (US$6.4 billion) investment, followed by Schneider Electric in 28th position with €2 billion.
EDF emerges as the top electricity company in the listing – as it does in the global line up – just making Europe’s top 50 in 49th position with an almost €1 billion R&D investment.
Iberdrola then in 105th position, ranks as the top private utility in the listing with €384 million (US$394 million) in R&D – the third consecutive year Iberdrola has held this ranking, according to a company statement.
Other energy and utility companies making up Europe’s top ten are:
Ørsted – €309 million (position 122)
SNAM – €246 million (148)
Grundfos – €230 million (157)
Energias de Portugal – €222 million (160)
Veolia – €200 million (172)
E.ON – €151 million (207)
Engie – €142 million (212)
Terna – €137 million (214)
In Europe’s case the 800 listing threshold is an investment of €7.1 million (US$7.3 million).
In the global rankings, EDF is in position 225, with other electricity companies following being Kepco (413) and China’s CGN Power (420), and then Iberdrola (510).
In its statement Iberdrola states the company considers innovation to be a strategic variable and the main tool for guaranteeing its sustainability, efficiency and competitiveness.
By 2030, Iberdrola is planning to exceed €4 billion in investment in R&D and innovation, primarily for projects related to renewable energy, smart grids, digital transformation and developing tailor-made solutions for customers.
R&D investment overview
In the overview of R&D trends, the Joint Research Centre highlights strong growth in research and innovation investments by EU-headquartered companies, up 9.8%, surpassing both their US at 5.9% and Chinese at 9.6% counterparts for the first time since 2013.
This is despite over the past 10 years, R&D investment by the EU scoreboard companies growing more slowly than that of US and Chinese companies.
By sector, as in the previous years, four – ICT hardware and software, health and automotive – are responsible for more than three quarters of the global R&D investment, with the main drivers of growth companies in ICT software, health, and to a lesser extent, ICT hardware.
As noted, EU-based companies maintain global automotive R&D leadership with health accounting for the second largest share in the region, while US-based companies lead in ICT-related sectors and health.
Chinese companies have grown steadily across all sectors over the last 10 years.
Some other notable findings of the study are that EU-based companies own the most subsidiaries globally at 36%, slightly above the US companies with 34.3% of subsidiaries and that R&D investment growth has by far outpaced both labour productivity and patent growth.
Although R&D still contributes positively to labour productivity and patenting, the econometric analysis indicates a global trend of diminishing returns on R&D investment for top R&D investors, suggesting that more and more R&D investment is required today than in the past in order to generate marketable products or new ideas.
However, merely pushing for more R&D investment by the EU private sector is insufficient as a policy measure on its own, the report indicates. Improving R&D routines/processes, attracting and retaining top R&D talent, and crafting highly effective policy instruments to steer R&D incentives towards impactful innovations are also needed.
Jonathan Spencer Jones
Specialist writer
Smart Energy International
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