EU companies lead global R&D investment growth, breaking decade-long trend

The European Commission published today the 2024 EU Industrial R&D (Research and Development) Investment Scoreboard, a comprehensive analysis of the world’s top 2000 R&D investing companies in the year 2023.

The report reveals strong growth in research and innovation investments by EU-headquartered companies (+9,8%), surpassing both US (+5,9%) and Chinese (+9,6%) counterparts for the first time since 2013.

Graphic showing global research and development growth of EU companies ahead of China — Global research and development growth of EU companies ahead of China and US

Produced since 2004 by the JRC, in collaboration with European Commission’s Directorate General Research & Innovation, the EU Industrial R&D Investment Scoreboard provides economic information from the latest financial accounts of the world's top 2000 R&D investors. It also includes an extended sample of the top 800 R&D investing companies based in the EU. Investments from the companies covered in the Scoreboard account for 85-90% of global private R&D funding.

Record global research and development investments, despite slowing growth rate

Despite slowing global R&D growth (+7.8% vs. +12.6% in 2022), in 2023 the world’s top 2000 R&D investing companies dedicated €1257.7 billion to R&D. This represents an all-time record and an absolute increase of EUR 90.6 billion compared to 2022.

World’s top 2000 R&D investing companies by main sector of activity

The slower growth rate was due to a marked deceleration of R&D growth by the top 50 companies (6.5% in 2023, compared to 16.9% in 2022). Together, these companies invested EUR 504 billion in R&D in 2023, which accounts for 40.1% of the total R&D investment by Scoreboard companies.

Concentration of R&D investment in a relatively small number of companies is a consistent trend across the past two decades, underscoring their importance in driving global R&D trends. Of these top 50 world investors, 22 are headquartered in the US, 11 in the EU, 5 in China and 5 in Japan, and 10 from the rest of the world.

The top 10 ranking is dominated by US-based firms. Alphabet is in first place with an R&D investment of EUR 39.8 billion. Volkswagen is the only EU-based firm in the top 10, ranking 5th with EUR 21.8 billion in R&D investment.

A closer look to EU companies: the automotive sector tops investments

The 2024 EU Industrial R&D Investment Scoreboard also provides an in-depth analysis of the top 800 R&D investing EU headquartered companies. Spread over 19 member states, they invested EUR 247.7 billion in R&D in 2023, representing an annual growth of +8.7%.

Top 800 R&D investing EU headquartered companies by location

The automotive sector dominates the EU 800 list, accounting for 34.2% of R&D investments, followed by the health sector (19.3%), ICT hardware (14%) and ICT software (7.8%).

EU companies in the semiconductors (ASML, NXP, Infineon), automotive components (Forvia and ZF), and biotech/pharma sectors (Biontech) have seen extraordinary increases in R&D investment, ranging from 200% to 5000% over the past decade. Such investment increases suggest ongoing diversification and growth potential in these areas.

More and more R&D investment required to generate patents and sales

Beyond monitoring, the 2024 edition combines Scoreboard metrics with various analyses, such as a productivity analysis on R&D investments and merger and acquisition (M&A) activity. Data shows R&D growth has outpaced both labour productivity and patent growth, suggesting that more R&D investments by these large global players are required to generate sales or new ideas.

The report also notes that M&A activity can drive short-term growth but does not necessarily increase productivity. However, sectors such as aerospace and defence, construction and ICT software show a strong positive link between R&D investment and productivity.

The science behind the policy

The Scoreboard is published annually in order to provide a reliable, up-to-date benchmarking tool for comparisons between companies, sectors, and geographical areas, as well as to monitor and analyse emerging investment trends and patterns. It is based on company data extracted directly from each company's annual report.

The report has become a reference for analyses and data in science, industry and policymaking, with major publications referring to its findings, such as the recent report by Mario Draghi - The future of European competitiveness, the report Align, act, accelerate, as well as various policy documents in the past 20 years.

The Scoreboard emphasises open data practices, making its database publicly available for stakeholders to conduct their benchmarking and monitoring exercises, in accordance with the Commission’s open science practice. 