The Globalization of R&D
The latest edition of Booz Allen Hamilton’s Global Innovation 1000 was released earlier this month. The list ranks and assesses the world’s 1000 biggest corporate research and development (R&D) investors. The globalization of R&D is the big trend found among this year’s top R&D investors. In fact, the top eighty US R&D spenders invested $80.1 billion overseas (out of total spending of $146 billion). US firms are not alone in this trend, as top European and Japanese R&D spenders also much of their R&D funds overseas. The top 50 European firms deployed roughly 43 percent of funds overseas, while Japanese firms spend 56 percent funds outside of Japan. While the traditional R&D leaders are moving much R&D offshore, the pattern is not simply one of outsourcing to other locations. A wider circulation of R&D is happening, as US, Europe, and Japan invest overseas, but also attract incoming R&D dollars, too. In fact, forty percent of corporate R&D spending in the US is generated from firms headquartered elsewhere. Overall, the Global Innovation 1000 now spend an average of 55 percent of their R&D funds in other countries. The globalization of R&D has now become the norm for the world’s most innovative firms.
The 2008 Global Innovation 1000 is profiled in the Winter 2008 Strategy+Business article, “Beyond Borders: The Global Innovation 1000,” by Barry Jaruzelski and Kevin Dehoff.
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