The sectoral distribution of R&D
R&D spending by companies in the UK1000 in 2008 was dominated by five sectors: pharmaceuticals and biotechnology; aerospace and defence; software and computer services; banks; and automobiles and parts. Together these sectors accounted for 59% of R&D (see Figure 3), similar to the previous year’s results. The emergence of the banking sector as one of the big five in R&D spending is a significant change to last year’s Scoreboard. The fixed line telecommunications sector saw a decline of 11% in its R&D investment, and therefore dropped out of this group.
As in previous Scoreboards, the pharmaceuticals and biotechnology sector was by far the largest investor, accounting for 36% of the UK1000 total. It invested six times as much as the next biggest sector. The dominance of pharmaceuticals and biotechnology has eroded only slightly as firms in other sectors have increased their investment in R&D at a faster rate.
Figure 3: Distribution of UK1000 R&D expenditure (2008, %)
Globally, five sectors dominated expenditure by the world’s leading R&D investors. Three of the sectors were also among the five largest spending sectors in the UK – pharmaceuticals and biotechnology, software and computer services and automobiles and parts. Technology hardware and equipment and electronic and electrical equipment made the next two.
The pharmaceuticals and biotechnology sector remained the largest sector globally as well but was only just ahead of automobiles and parts and technology hardware and equipment. Unlike in the UK, no sector dominates overall R&D spending; the three biggest sectors have broadly similar shares of total R&D investment among the G1000. Together, the top five sectors accounted for more than 68% of the investment by the G1000 (see Figure 4). This finding mirrors the results of last year’s Scoreboard.
Figure 4: Distribution of G1000 R&D expenditure (2008, %)
The most important sectors by R&D investment vary significantly between the leading R&D countries over the past five years (see Figure 5). France, Japan and the US had relatively diversified portfolios, with at least three sectors contributing a significant amount of overall R&D invested. Germany’s R&D was more concentrated in the automobiles and parts sector. R&D in Switzerland and South Korea remained highly specialised in pharmaceuticals and biotechnology and electronic and electrical equipment respectively. Among the 46 UK firms in the G1000, R&D was strongly focussed in the pharmaceuticals and biotechnology sector. However, the UK also had the largest amount of R&D (51%) outside the major sectors of all the leading countries covered by the analysis.
Figure 5: R&D expenditure by sector across G1000 (as % of country total)
