Amazon spent the most on research and development in the fiscal year 2022, with over 73 billion U.S. dollars. Meta, Alphabet, Apple, and Huawei rounded out the top five of companies with the highest R&D spending that year.

Leading by innovation

Spending money on research and development, or R&D, is how a company innovates new technologies and conducts research to develop new products and services. R&D allows companies, such as Amazon, to stay ahead of their competition and work towards the future. Most of the R&D spending in the world is in 2021 was within health & pharma, which should be seen in light of the COVID-19 pandemic, and the United States is the leading country for R&D expenditure in the world.

AI and R&D

Currently, many companies are investing in Artificial Intelligence (AI) innovation, including the ethical implications of AI and how it can be used to better society as a whole. Major companies, such as Amazon and Alphabet, are throwing their collective weight into this issue and conducting research into its future applications.

In 2022, the highest share of research and development spending (R&D) was made within the hardware technology producing industry, accounting for a total of nearly 23 percent of the global R&D spending. The health sector and software producers followed in second at nearly 21 percent each. In total, global R&D spending reached 2.5 trillion U.S. dollars in 2022.

Health industry and COVID-19

The high share spent by the health industry must be seen in relation with the COVID-19 pandemic that started spreading in late 2019 and caused deaths, lockdowns, and restrictions throughout 2020 and onwards. As governments and pharmaceutical companies sought to find an efficient vaccine against the virus, investment in research continued to increase. However, regardless of the pandemic, R&D spending within health care is essential in order to combat a variety of diseases, from small pox via malaria to cancer.

Information and communication technology

As people around the the world become more and more dependent on information and communication technology, research spending by companies producing hardware and software continues to increase as these seek to further develop. For instance, all the seven companies with the highest R&D spending in 2022 were either software or hardware producing companies. The largest single investor was the software giant Amazon.

In 2023, pharmaceutical companies AstraZeneca spent over 23 percent of its prescription drug revenues on research and development. In general, big pharmaceutical companies spend around 20 percent of their revenues on research and development.

Global R&D spending

In 2023, the pharmaceutical industry spent some 260 billion U.S. dollars on research and development, which is an increase compared to the previous year. By 2028, expenditures are expected to reach a total of over 300 billion U.S. dollars. Some 22,800 prescription drugs were in the 2024 R&D pipeline, a global number that has been growing with each consecutive year. The drug count has tripled since 2006 and is set to increase even further in the future.

AstraZeneca

AstraZeneca is a British-Swedish multinational pharmaceutical company, based in Cambridge, United Kingdom. One of the company’s top products in 2023 was Tagrisso, which is used in the treatment of certain types of non-small cell lung carcinoma. The product generated 5.8 billion U.S. dollars in revenue that year. Revenue earned through Tagrisso has increased significantly over the last years.

This statistic represents the world's top 50 pharmaceutical and biotechnology companies based on R&D spending growth through the year 2023. The biggest one-year growth was reported for Poseida Therapeutics with a growth rate of 311 percent.

Volkswagen was the automaker spending the most on research and development in 2023, with expenses reaching nearly 2.2 billion euros that year. The manufacturer also recorded a high research and development intensity, with its expenses amounting to around 6.8 percent of its sales revenue. In contrast, Hyundai Motor recorded the lowest R&D intensity of the automakers surveyed, only spending 2.4 percent of its sales on research expenses. Automotive R&D spending within the global R&D expenditure Research and development spending has been steadily increasing since 1996, and is forecast to reach nearly 2.5 trillion purchasing power parity U.S. dollars worldwide in 2022. The United States, China, Japan, and Germany were the countries contributing the most to this expenditure, with the U.S. expected to spend some 679.4 billion U.S. dollars in R&D expenses that same year. Automotive research and development spending was projected to reach some 124 billion U.S. dollars in 2022, spearheaded by U.S. investments. Manufacturers' increased focus on electric vehicles, connected vehicles, and autonomous vehicles contributes to this steady R&D expenditure. Electric vehicles as vectors for innovation Amid stricker transport emission goals set by some governments, automakers have increased ther commitment to produce and sell more electric vehicles. This process of electrification has led to a growth in the volume of available EV models worldwide, with the offer more than doubling between 2017 and 2021. Electric vehicle patent filing has also been steadily increasing, while the number of fossil fuel vehicle patents filed had been dropping since 2016/17. In 2020, motor vehicle and parts recorded the second largest share of green patent filings worldwide. This commitment to research and development in sustainable transportation has boosted manufacturers' R&D spending throughout 2022.

The top 50 pharmaceutical companies by prescription sales in 2023 – and their research and development (R&D) spending – included big names such as Johnson & Johnson, Novartis, and AbbVie. During that year, Johnson & Johnson's Rx sales were approximately 53.5 billion U.S. dollars. Thus, the American pharma giant was both the largest pharmaceutical company based on pure pharma revenue worldwide and the second ranked pharmaceutical company based on R&D spending. Johnson & Johnson spent 14.8 billion U.S. dollars on R&D in that year.

Pharmaceutical R&D spending Research and development in the pharmaceutical industry involves the identification and development of compounds used to make new drugs. The pharmaceutical industry has the largest percentage of spending attributable to R&D among all industries. Research and development spending in the pharmaceutical industry around the world is increasing over time. However, there have been variations in the growth of research and development spending with a peak during the pandemic years 2020 and 2021.

New pharmaceutical products The goal of R&D is to produce new drugs and compounds. Globally, the U.S. pharmaceutical industry created the largest number of new drugs and compounds between 2018 and 2022, followed by Europe. Among U.S. pharmaceutical companies, there are various levels of success for new drugs depending on the phase of development. The data shows that between phase I and II alone, already over half of all drugs are failing.

Cyprus CY: Firms That Spend On R&D: % of Firms data was reported at 15.000 % in 2019. Cyprus CY: Firms That Spend On R&D: % of Firms data is updated yearly, averaging 15.000 % from Dec 2019 (Median) to 2019, with 1 observations. The data reached an all-time high of 15.000 % in 2019 and a record low of 15.000 % in 2019. Cyprus CY: Firms That Spend On R&D: % of Firms data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Cyprus – Table CY.World Bank.WDI: Company Statistics. Percent of firms that spend on research and development.;World Bank, Enterprise Surveys (http://www.enterprisesurveys.org/).;Unweighted average;

South Africa ZA: Firms That Spend On R&D: % of Firms data was reported at 16.800 % in 2020. South Africa ZA: Firms That Spend On R&D: % of Firms data is updated yearly, averaging 16.800 % from Dec 2020 (Median) to 2020, with 1 observations. The data reached an all-time high of 16.800 % in 2020 and a record low of 16.800 % in 2020. South Africa ZA: Firms That Spend On R&D: % of Firms data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s South Africa – Table ZA.World Bank.WDI: Company Statistics. Percent of firms that spend on research and development.;World Bank, Enterprise Surveys (http://www.enterprisesurveys.org/).;Unweighted average;

For the year 2024, Pinterest's research and development expenditure was 1.24 billion U.S. dollars. This is an increase of 16 percent compared to the year 2023. Overall, 2024 saw the highest research and development spending for Pinterest, exceeding the previous record of 2029, when the company spent 1.2 billion USD on R&D.

In 2023, the methodology that contributed most to the revenue of market research companies was online/mobile quantitative research with 34 percent of the market share. Second in the list was automated digital/electronic, with 9.6 percent.

Saudi Arabia Firms That Spend On R&D: % of Firms data was reported at 7.800 % in 2022. Saudi Arabia Firms That Spend On R&D: % of Firms data is updated yearly, averaging 7.800 % from Dec 2022 (Median) to 2022, with 1 observations. The data reached an all-time high of 7.800 % in 2022 and a record low of 7.800 % in 2022. Saudi Arabia Firms That Spend On R&D: % of Firms data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Saudi Arabia – Table SA.World Bank.WDI: Company Statistics. Percent of firms that spend on research and development.;World Bank, Enterprise Surveys (http://www.enterprisesurveys.org/).;Unweighted average;

Ethiopia ET: Firms That Spend On R&D: % of Firms data was reported at 4.400 % in 2015. This records a decrease from the previous number of 19.000 % for 2011. Ethiopia ET: Firms That Spend On R&D: % of Firms data is updated yearly, averaging 11.700 % from Dec 2011 (Median) to 2015, with 2 observations. The data reached an all-time high of 19.000 % in 2011 and a record low of 4.400 % in 2015. Ethiopia ET: Firms That Spend On R&D: % of Firms data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Ethiopia – Table ET.World Bank: Company Statistics. Percent of firms that spend on research and development.; ; World Bank, Enterprise Surveys (http://www.enterprisesurveys.org/).; Unweighted average;

France Firms That Spend On R&D: % of Firms data was reported at 21.100 % in 2021. France Firms That Spend On R&D: % of Firms data is updated yearly, averaging 21.100 % from Dec 2021 (Median) to 2021, with 1 observations. The data reached an all-time high of 21.100 % in 2021 and a record low of 21.100 % in 2021. France Firms That Spend On R&D: % of Firms data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s France – Table FR.World Bank.WDI: Company Statistics. Percent of firms that spend on research and development.;World Bank, Enterprise Surveys (http://www.enterprisesurveys.org/).;Unweighted average;

Panama PA: Firms That Spend On R&D: % of Firms data was reported at 7.400 % in 2010. This records a decrease from the previous number of 26.400 % for 2006. Panama PA: Firms That Spend On R&D: % of Firms data is updated yearly, averaging 16.900 % from Dec 2006 (Median) to 2010, with 2 observations. The data reached an all-time high of 26.400 % in 2006 and a record low of 7.400 % in 2010. Panama PA: Firms That Spend On R&D: % of Firms data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Panama – Table PA.World Bank: Company Statistics. Percent of firms that spend on research and development.; ; World Bank, Enterprise Surveys (http://www.enterprisesurveys.org/).; Unweighted average;

Between 2003 and 2017, annual research and development (R&D) investment by pharmaceutical companies in the United States averaged 195,907 U.S. dollars per employee. The average R&D expenditure for all manufacturing industries during this time was roughly 15 thousand U.S. dollars per employee, which was 13 times less than the pharmaceutical industry.

What is the relationship between R&D investment and sales? The pharmaceutical industry is also one of the biggest investors in R&D in relation to sales, with companies spending around 20 percent of their revenue on R&D activities. In 2019, members of the Pharmaceutical Research and Manufacturers of America (PhRMA) trade group generated approximately 377 billion U.S. dollars in worldwide revenues and spent around 83 billion U.S. dollars on R&D.

Pharmaceutical companies: A focus on Pfizer Pfizer is one of the leading pharmaceutical companies worldwide and has a brand value of approximately 4.8 billion U.S. dollars. The company, which manufactures the brand name prescription drug Viagra, has spent an average of eight billion U.S. dollars per year on R&D since 2014. Pfizer employed approximately 88,000 people worldwide in 2019, which means the company’s R&D investment per employee was around 98,000 U.S. dollars for the year.

EG: Firms That Spend On R&D: % of Firms data was reported at 3.200 % in 2016. This records an increase from the previous number of 2.100 % for 2013. EG: Firms That Spend On R&D: % of Firms data is updated yearly, averaging 2.650 % from Dec 2013 (Median) to 2016, with 2 observations. The data reached an all-time high of 3.200 % in 2016 and a record low of 2.100 % in 2013. EG: Firms That Spend On R&D: % of Firms data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Egypt – Table EG.World Bank: Company Statistics. Percent of firms that spend on research and development.; ; World Bank, Enterprise Surveys (http://www.enterprisesurveys.org/).; Unweighted average;

Central African Republic CF: Firms That Spend On R&D: % of Firms data was reported at 44.300 % in 2023. This records a decrease from the previous number of 48.400 % for 2011. Central African Republic CF: Firms That Spend On R&D: % of Firms data is updated yearly, averaging 46.350 % from Dec 2011 (Median) to 2023, with 2 observations. The data reached an all-time high of 48.400 % in 2011 and a record low of 44.300 % in 2023. Central African Republic CF: Firms That Spend On R&D: % of Firms data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Central African Republic – Table CF.World Bank.WDI: Company Statistics. Percent of firms that spend on research and development.;World Bank, Enterprise Surveys (http://www.enterprisesurveys.org/).;Unweighted average;

Belgium BE: Firms That Spend On R&D: % of Firms data was reported at 43.400 % in 2020. Belgium BE: Firms That Spend On R&D: % of Firms data is updated yearly, averaging 43.400 % from Dec 2020 (Median) to 2020, with 1 observations. The data reached an all-time high of 43.400 % in 2020 and a record low of 43.400 % in 2020. Belgium BE: Firms That Spend On R&D: % of Firms data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Belgium – Table BE.World Bank.WDI: Company Statistics. Percent of firms that spend on research and development.;World Bank, Enterprise Surveys (http://www.enterprisesurveys.org/).;Unweighted average;

This statistic depicts the top medical technology companies ranked by their research and development spending as a percentage of revenues in 2017, and a projected share for 2024. In 2017, Roche spent 11.2 percent of its revenue on medtech research and development and is projected to decrease spending to under nine percent in 2024. Medical technology is used for diagnosis, monitoring, or treatment of diseases or medical conditions.

Iraq Firms That Spend On R&D: % of Firms data was reported at 12.500 % in 2022. Iraq Firms That Spend On R&D: % of Firms data is updated yearly, averaging 12.500 % from Dec 2022 (Median) to 2022, with 1 observations. The data reached an all-time high of 12.500 % in 2022 and a record low of 12.500 % in 2022. Iraq Firms That Spend On R&D: % of Firms data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Iraq – Table IQ.World Bank.WDI: Company Statistics. Percent of firms that spend on research and development.;World Bank, Enterprise Surveys (http://www.enterprisesurveys.org/).;Unweighted average;