Research spending by corporations: 14 Swiss companies among the top 500 worldwide

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• Research and development (R&D) spending is growing significantly faster in North America than in Asia and Europe; of the top 500 investors, one-third come from the U.S.
• Looking at R&D spending, 14 Swiss corporations are among the top 500, putting Switzerland in ninth place globally.
• In terms of total R&D spending, Switzerland ranks fifth with 33 billion euros, while the U.S. ranks first with 475 billion euros.

Zurich, 4 May, 2023. The world's most innovative top corporations are investing more in their future: the research and development budgets of the 500 companies with the highest R&D spending worldwide increased by 14% year-on-year to the equivalent of 889 billion euros in 2022. 475 billion euros were invested by the 164 corporations headquartered in the United States - an increase of 16% year-on-year. They were followed - at a considerable distance - by companies from Japan (87 billion, up 6%) and Germany (68 billion, up 11%).

R&D spending by the top 14 Swiss investors in the ranking climbed by 5% in 2022 to 33 billion euros. In terms of spending in absolute amounts, Switzerland ranks 5th in the world, with only companies from the US, Japan, China and Germany investing more. "In principle, this is a positive sign for Switzerland as a business location. The framework conditions for investments in research and development are still considered attractive," says Stefan Rösch-Rütsche, Country Managing Partner of EY in Switzerland. R&D investments are investments in the future; this makes one confident about the prospects of Switzerland as a business location. "At the same time, however, it must be noted that investments in Switzerland have increased by 5%, which is significantly less than the investments of the Top 500, which have increased by 14%. In addition, these investments focus too one-sidedly on the health sciences sector," says Rösch-Rütsche. In other promising sectors - especially in the technology sector - Switzerland is not among the leaders.

Among the top investors worldwide, however, there are more and more US corporations - and fewer and fewer European companies. A long-term comparison shows that since 2018, the number of U.S. companies in the top 500 ranking has risen from 140 to 164, while Europe's share has shrunk from 142 to 133 companies. Switzerland is represented by one less company than in 2018. Asia also lost weight, with the number of Asian groups in the ranking falling from 213 to 191.

These are the findings of a study by the audit and consulting firm EY, for which the 500 listed companies worldwide with the largest R&D budgets were examined.

Top 500: One third based in the USA - 14 companies in Switzerland

164 of the 500 companies analyzed come from the USA, followed by companies from Japan (98) and China (38). This means that one third of the companies with the highest R&D expenditures worldwide are based in the United States. Switzerland ranks 9th with 14 companies. The following Swiss companies made it into the Top 500 with their respective R&D investments: Roche Holding AG (ranked 8th with 16 billion euros), Novartis AG (ranked 14th with 9.5 billion), STMicroelectro-nics N.V. (ranked 103rd with 1.8 billion), Nestlé S.A. (ranked 113th with 1.7 billion), ABB Ltd (ranked 160th with 1.1 billion), TE Connectivity Ltd. (ranked 219 with 683 million euros), Alcon Inc. (ranked 221 with 668 million), Givaudan SA (ranked 261 with 520 million), The Swatch Group Ltd (ranked 391 with 245 million), Swisscom Ltd (ranked 400 with 236 million), Sika Ltd (ranked 403 with 231 million), Holcim Ltd (ranked 408 with 228 million), Schindler Holding Ltd (ranked 420 with 207 million) and Clariant Ltd (ranked 454 with 159 million). In terms of the number of companies in the top 500, Switzerland is practically on a par with the United Kingdom. "This is an expression of the strength of Switzerland as a research location. This is due in particular to the availability of human resources in research and development and the proximity to the world's leading technical universities," says Rösch-Rütsche.

The global top ten - with one company from Switzerland

Seven companies in the global top ten with the highest innovation spending are based in the United States, six of them are digital groups. Amazon had the largest innovation budget in 2022 - the equivalent of almost 70 billion euros* (up 31%). Google parent company Alphabet follows in second place with development spending of 38 billion euros (up 25%), ahead of Meta Platforms (including Facebook, WhatsApp and Instagram) with 34 billion euros in research and development spending (up 43%). The digital pioneers Apple (25 billion, up 20%), Microsoft (23 billion euros, up 18%), Samsung Electronics (18 billion, up 10%) and Intel (17 billion euros, up 15%) also invested above average in their future.

Two European companies also occupy positions in the top ten: Roche is in eighth place (16 billion euros, up 8%) and Volkswagen in ninth (14 billion euros, up 12%). Behind them comes the U.S. pharmaceuticals group John-son&Johnson (14 billion euros, down 1%) - the only company in the top ten where innovation spending fell.

The top technology groups from the USA are obviously the measure of all things. However, it is not the case that all companies from the United States spend more money on research per se. At 17.4%, European pharmaceutical companies on average invest a higher proportion of their sales in R&D than U.S. companies, where the so-called R&D intensity is only 14.9%. And at 5.9%, the R&D intensity of European automotive companies is also higher than that of their U.S. competitors (3.6%).

Swiss companies above the global average for R&D intensity

Last year, the sales of the companies analyzed rose by 16% and operating profit increased by 15% - R&D spending did not quite keep pace with growth of 14%. As a result, the R&D ratio of the top 500 companies declined minimally year-on-year to 6.1% in 2022. For groups headquartered in the United States, the average ratio of R&D spending to sales was 8.1% - well above the global median. Companies from Switzerland (6.8%) also invest above average in research and development. Switzerland ranks third after the USA and the Netherlands (7.6%).

*Amazon does not provide any information on the item "Expenditure on research and development". As an approximation, the figures for spending on "technology and content" are used here, although these are higher than the actual spending on research and development.

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