Global Innovators Report underlines French Government’s R&D investment, UK & Germany still lacking.

Oct 8, 2013
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Thomson Reuters released this week their annual Top 100 Global Innovators report – the website & the downloadable PDF – which measures the top 100 companies in terms of their R&D investment. The report measures innovation based on patents, measuring volume, success, reach & influence of a company’s patent porfolio – to be considered for the award, companies were required to have filed at least 100 patents in the past three years. The report equally filed companies & patents by category, focussing on semiconductor & electronic components, computer hardware, automotive, consumer products, industrial, telecommunications & other areas of innovation.

Among the top 100 companies, 45 were from the USA, 28 from Japan, and 12 from France – remaining companies represented Europe & Asia. As compared to last year’s report, we see that the top three countries remain the same, and they still make up 85% of the list.

The report made a large emphasis on the lack of the UK’s presence in the Top 100 Global Innovators list; pointing out a lack of government support for R&D:

“This is the second year in which the United Kingdom is missing, a fact that is underscored by the low R&D investment as a percent of GDP in that region. The UK was the lowest of the UK, Japan and France in R&D spend through 2010.2 The trend is also reflective of the evolution of the UK economy away from manufacturing and toward a more service-sector orientation, with a heavy reliance on financial businesses” – Thomson Reuters

The report goes on to juxtapose the UK’s R&D investment in comparison to France, noting the nearly $50 Billion that French businesses spent on R&D in 2010 ( in contrast to the $24.1 Billion in the UK in the same year):

“…Businesses in France spent 53 percent more on R&D than their counterparts in the UK, despite the fact that France’s economy is only 14 percent larger than the UK’s….There is a direct correlation between a government’s commitment to innovation and its R&D tax policies to its ability to attract and retain innovative organizations”

The report also sheds light on Germany’s current government policy towards R&D, pointing out that Germany’s High Tech Strategy has only been adopted in 2006 (and updated in 2010), which may account for its lack of representation on the list:

“In contrast to other countries, there is not a unified strategic policy council to coordinate research and/or innovation policies in Germany. This is despite the german Council of science and Humanities, a joint institution with representatives from both federal and state levels, performing some aspects of the work inherent to a strategic unit for research policy.”

The report interestingly notes that it is only in the beginning of the 21st Century that Japan made significant changes to the benefits of R&D Tax Credits (which now write off against corporate income),

While there are many indicators of innovation in a country, patents are arguably one of the most concrete ways of tracking a company, and adversely, a country’s ability to be innovative. The overall tone of the report is that there is a direct relationship between a government’s policy around R&D support & the ability to grow & maintain innovative companies inside its borders.

The report notes that France, which represents the majority of Europe’s innovators (followed by Switzerland (4), Germany (3), Sweden (2), & The Netherlands (1)), made changes to its R&D policy as recently as 2008 after a series of pharmaceutical companies changed countries. France was not well-represented in the pharmaceutical category; however, both L’Oreal & Arkema made the list, in addition to Alcatel-Lucent, the CNRS, the Commissariat à l’Energie Atomique, EADS, IFP Energies Nouvelles, Michelin, Safran, Thales & Valeo.

The complete 2013, 2012 & 20111 list, with country & category filters, is available on the Top 100 Global Innovators website here