Taiwan lags behind world’s top 1,000 companies in R&D expenditure study

COMPETITIVE EDGE::China saw the biggest increase in research and development spending of the regions that were analyzed, followed by Europe and North America

By Crystal Hsu  /  Staff reporter

Mon, Nov 05, 2018 - Page 16

Thirty local firms made this year’s Global Innovation 1000 study — one fewer than last year — as global firms assign more importance to research and development (R&D) to stay competitive and profitable, accounting firm PricewaterhouseCoopers LLP (PwC) said in a report on Tuesday.

R&D spending totaled NT$444.3 billion (US$14.45 billion) in Taiwan, a 0.2 percent increase from last year, which accounted for 3.3 percent of their combined revenue, PwC Taiwan said.

The growth lags far behind an 11.4 percent increase for the world’s top 1,000 companies, which spent a record US$782 billion on R&D this year, PwC Taiwan executive vice president Paul Liu (劉鏡清) said.

Revenues for the 1,000 firms also grew 11.4 percent annually, even though the newest figures left R&D intensity, or innovation spending as a percentage of revenue, unchanged at 4.5 percent from last year, the annual survey said.

However, the 88 high-leverage innovators saw their sales advancing 2.6 times as fast as the pool, while their market value soared 2.9 times higher, it said.

Local firms Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Pegatron Corp (和碩), Pou Chen Corp (寶成工業) and Siliconware Precision Industries Co (矽品精密) were recognized as high-leverage innovators, the survey said.

With regard to R&D spending, Hon Hai Precision Industry Co (鴻海精密) leads the pack in Taiwan, followed by TSMC, MediaTek Inc (聯發科), Delta Electronics Inc (台達電) and Asustek Computer Inc (華碩), it said.

R&D spending by the top 20 companies reached US$214.5 billion, accounting for 27.4 percent of the total, the survey said.

For the second year in a row, Amazon.com Inc led the top-20 list with R&D expenditure of US$22.6 billion, up a massive 40.6 percent from last year, it found. Alphabet Inc was second, spending US$16.2 billion.

Facebook Inc posted the biggest climb on the top-20 list, up six places from its position last year to No. 14, it said.

All surveyed regions increased their R&D expenditure, with China staging the biggest increase of 34 percent, followed by Europe’s 14 percent gain and North America’s 7.8 percent increase, the survey said.

R&D spending rose in the computing and electronics, healthcare, auto, and software and Internet — the four industries that dominate the top 20 list, it said.

The survey observed a US$13 billion R&D surge in spending in computing and electronics, from flat spending over the previous five years, almost a third of which was attributable to increased spending at Samsung Electronics Co and Apple Inc.