In my second blog posting I wrote about IEEE Spectrum’s survey of 2004 R&D spending. Today I looked at their latest report, for 2007, to see what happened to those top companies in the intervening years. Ford slipped from #1 to #8 despite holding R&D at 4.3% of sales, meanwhile Toyota climbed from #3 to #1 even while their spending dropped from 4.1% to 3.6% of sales. Size matters. GM clearly takes R&D seriously, climbing from #5 to #2 by increasing R&D spending from 3.4% to 4.5% of sales – an increase of $1.6 billion. Maybe if they survive, they really will bring the Volt to market and recapture lost market share in the new energy economy.
In the computer world, Microsoft is on top at #9 overall, with R&D spending increasing a bit more slowly than sales, but spending an impressive $93k per employee. Sun slipped slightly in rank and in spending as percent of sales, on a modest increase in R&D dollars. IBM increased R&D both in absolute dollars and in percent of sales, but slipped in rank. With their size comes a big R&D budget. AMD is a real standout, doubling R&D spending, moving up from #89 to #65, and increasing spending as percent of sales from 18.7% to 30.0%. AMD’s R&D per employee at $112k exceeds even that of the pharamaceutical companies which traditionally lead in this measure.
In the table below I colored the 2007 "Rank" column red if the company declined both in rank and in R&D spending as percent of sales. I colored it green if the company increased both in rank and in R&D spending as percent of sales. In the 2007 "$k/ employee" column I colored it red if the spending was below the median of IEEE’s top 100 companies, and green if it was above the 80% percentile.
|Company||Rank||R&D ($B)||% of Sales||Rank||R&D ($B)||% of Sales||$k/ employee|
|Glaxo Smith Kline||9||5.3||13.9%||12||6.3||13.9%||61|
|Johnson & Johnson||10||5.2||11.0%||6||7.7||12.6%||64|