2024 EU Industrial R&D Investment Scoreboard Highlights 9.8% Increase in R&D Spending

The European Commission has released the 2024 EU Industrial R&D Investment Scoreboard, highlighting significant trends in global R&D investments. Notably, EU-headquartered companies achieved a 9.8% increase in R&D spending, surpassing the growth rates of the US (5.9%) and China (9.6%) for the first time since 2013. The report analyzes data from the top 2,000 R&D-investing companies worldwide and features an extended analysis of the top 800 EU-based firms. 

EU’s Top 800 Companies Invest USD$ 259.92 billion Accounting for 85-90% of Global R&D

Compiled annually, the Scoreboard provides insights into companies that together account for 85-90% of global private R&D funding. The top 800 EU-headquartered companies invested USD$ 259.92 in R&D during 2023, achieving an 8.7% annual growth. These companies span 19 EU member states, with Germany leading the count at 233, followed by France with 117 and Sweden with 99.

Of these, multiple companies have made significant strides in shaping the future of R&D. One standout is NVIDIA, a company that has led the charge in AI innovation. With a market cap surpassing USD$ 3 trillion in June 2024, it became the world’s most valuable company, surpassing Microsoft and Apple. Its Graphics Processing Units (GPUs) have been key to powering the current wave of AI with its financial growth—reaching USD$ 60.9 billion in 2024 revenue.

Meta Platforms also continues to lead in research impact, with 144.5 citations and 27.3% R&D intensity. In 2024, Meta dedicated 27.5% of its revenue to R&D, the highest among tech companies. Its focus on AI has resulted in groundbreaking releases such as the Llama 3.1 405B, the world’s largest and most capable openly available foundation model. Meta’s innovations extend beyond software to hardware as well, with the successful launch of the Ray-Ban Meta glasses and the Quest 3S VR headset, both of which have gained significant traction in the market. 

Automotive Showed 13.2% Increase, ICT Slowed to 5.6%, & Health Records Encountered Weakest Growth Since 2013

In 2023, sectoral growth varied. The automotive sector saw a significant increase of USD$ 26.05 (13.2% growth) and led with 34.2% of total investments. This growth was driven by investments from EU companies like Volkswagen and BMW, Chinese manufacturers such as BYD and Geely, and other global companies. These investments focused on electric vehicles (EVs), autonomous driving, and sustainability technologies. However, not all sectors’ performance reached its top capacity. On one hand, growth in ICT software slowed to 5.6%, the lowest since 2016. Additionally, the health sector had its weakest growth since 2013, at 4.9%, while ICT hardware rose by 8%, above its long-term average.

Several factors have influenced these sectors’ performance and led to these outcomes. For instance, pharmaceutical companies are increasingly focusing on specialized treatments, such as immunotherapies and gene therapies, which require significant R&D investment but also face complex regulatory pathways. While this has contributed to a more cautious approach to expansion, advancements in biotechnology, particularly in rare diseases and personalized medicine, continue to attract funding. 

Although a slow overall growth has been encountered, ICT hardware has benefited from sustained growth in areas like 5G infrastructure, semiconductor development, and renewable energy technologies. ICT hardware and software made up 14% and 7.8% of the total investment respectively. Over the past decade, certain industries have seen substantial R&D growth, with semiconductor leaders ASML, NXP, and Infineon increasing their R&D spending by 200% to 5000%. As companies push for next-generation innovations, particularly in the transition to electric vehicles (EVs) and renewable energy, demand for high-performance chips and advanced materials remains strong. 

Author

Denisse Sandoval