Research expenditure by top innovators, compared to Spain

This post reviews the R&D investment among the top-10 most innovative economies in the world according the Global Innovation Index or GII (Cornell University, INSEAD, & WIPO, 2017), in comparison to Spain. For the purpose of visualising the innovation index for each country, the GII ranking has been included alongside each country´s name in all the figures.

First, a review on the gross domestic expenditure in R&D (GERD) based on the most recent data available (UNESCO, 2015) has been prepared in the Figure below.

Gross Domestic Expenditure in R&D for the most innovative economies in the world in comparison to Spain. Prepared by Francisco Velasco (www.fvelasco.com). Source: UNESCO (2015).

It is observed a group of greater investors in R&D, formed by Sweden, Denmark, Finland, Germany and USA (2.8 – 3.3% GDP expenditure in R&D last year), followed by a second group formed by Singapore (2,2% GDP) and Netherlands (2-2.2% GDP) and a third group of average expenditure ranking 1.22%-1,7% GDP formed by UK, Ireland and Spain. There is no linear correlation between the ranking in the GII and the spending in R&D, which is a predictable output considering that GII is built from a compendium of indicators including GERD.

Second, an analysis on the expenditure by top-global corporations for the same sample of countries has been made by looking at the  on the average R&D expenditure by the top-3 global companies in each country, using data from the Joint Research Council (JRC, 2016), and is shown in the Figure below.

Average Expenditure in R&D by the top 3-global companies in the most innovative countries in the world in comparison to Spain. Prepared by Francisco Velasco (www.fvelasco.com). Source: JRC (2015).

It can be observed a considerable difference in comparison to the gross domestic data earlier. USA is the listed country with greatest average expenditure in R&D by their 3-top global companies (totalling $11,775 million), followed by Germany ($8,987 million) and Switzerland (totalling $6,880 million). Spain ranked relatively high in terms of average expenditure by its top-3 global companies, with a total of $1,118 million and higher than Singapore, Denmark or Finland.

The data reviewed shows interesting insights about the role that top global corporations may have in the national R&D investment landscape in many countries. Spain, while ranking the 22nd position in terms of global innovation and having a relatively low gross domestic expenditure in R&D (1,22% GDP), shows a comparatively high average investment by global companies ($1,118 million), being the 13th greatest investor in the world in terms of average R&D investment among its top-3 global corporations. This is due to the high intensity of R&D activity by companies such as Santander Bank, Telefonica and Amadeus, and highlights a clear gap in comparison to the country´s R&D intensity.

 

REFERENCES

Cornell University, INSEAD, & WIPO. (2017). The Global Innovation Index 2017. (S. Dutta, B. Lanvin, & S. Wunsch-Vincent, Eds.) (10th ed.). Retrieved from https://www.globalinnovationindex.org/gii-2017-report

JRC. (2016). EU JRC Industrial R&D Investment Scoreboard 2016.

UNESCO. (2015). United Nations Educational, Scientific and Cultural Organization. Retrieved from http://uis.unesco.org/