UK ranks eighth globally for corporate R&D spending, investing £16.5bn last year

Published at 00:01 AM on 25 October 2016

  • Global R&D spend last fiscal year reached £446 billion, of which the UK accounts for 4%
  • Nearly half of total UK R&D spend is done by the healthcare industry
  • Apple, Alphabet (Google), and 3M cited as the three most innovative companies globally

UK companies invested £16.5 billion in research and development in the last fiscal year (ending June 2016), accounting for 4% of the global total (£446 billion) and ranking as the eighth highest investment by country.

The healthcare industry is leading the way in the UK, investing nearly half (48%) of total R&D spend. This is according to the 2016 Global Innovation 1000 Study published today [25 October 2016] by Strategy&, PwC’s strategy consulting business. The automotive and consumer industries complete the top three for R&D spending by UK companies, investing 18% and 8% of the total respectively.

Germany is currently the leading market in Europe by R&D spend, representing double the investment of the UK at 8%, ranking third globally after the United State (43%) and Japan (15%). 

37 UK-headquartered companies made the Innovation 1000 list this year, spending on average 2.9% of revenue on R&D, up slightly from 2.3% the year before, but considerably lower than the global average of 4.2%.

Mark Couttie, Strategy& partner in London, commented:

“Innovation is an essential component of competitive advantage and UK business leaders clearly recognise the importance of R&D to their future success. Brexit has only made R&D investment more pertinent in the UK. It’s vital that companies continue investing and remain agile to exploit new opportunities. To do this they need to ensure they have the right talent in place, invest in ambitious innovation models, and employ a strategic approach to M&A to help build the capabilities they will need to thrive.”

The Top 10 UK R&D spenders

Top 10 UK R&D spenders

Key global trends

  • Companies are shifting R&D spending away from physical products to software and services, with spending on software offerings increasing by 65% since 2015 (from £56 billion to £93 billion). Those who allocated more budget to software R&D reported significantly faster revenue growth. By 2020, the majority will have completed this shift;
  • By 2018, the healthcare sector will surpass computing and electronics to become the largest R&D spending industry globally (£108 billion v. £104 billion), and the software and internet industry will leap ahead of the automotive sector (£84 billion v. £69 billion); industrials rounds out the Top 5 R&D industries by spend;
  • The top five R&D spenders globally are Volkswagen, Samsung, Amazon, Alphabet (Google) and Intel, with Amazon and Google making bold moves up the list (+4 and +2 positions, respectively);
  • Global innovation professionals responding to a 2016 survey ranked Apple, Alphabet (Google), and 3M as the three Most Innovative Companies in the world;
  • The 10 Most Innovative Companies continue to outperform the Top 10 R&D Spenders on key performance metrics, as has been the case for each of the past seven years;

Mark Couttie continued:

“Regardless of industry, companies around the world are aiming to ensure competitive advantage by focusing on software investment, staying agile, and via ongoing testing and innovation.

“The software investment trend in particular will have huge implications for business strategies and future investment decisions across all industries, affecting everything from the talent they look to hire in the future, to the innovation models they pursue, and even the flow of where R&D is done across the world.”

The 10 Most Innovative Companies vs. Top 10 R&D Spenders globally

Global Innovative vs R&D


Notes for editors.

About the 2016 Global Innovation 1000 Study

  • As it has in each of the past 11 editions of the Global Innovation 1000, this year Strategy& identified the 1,000 public companies around the world that spent the most on R&D during the last fiscal year, as of June 30, 2016
  • To be included, companies had to make their R&D spending numbers public. The Global Innovation 1000 companies collectively account for 40 percent of the entire world’s R&D spending, from all sources, including corporate and government sources
  • Strategy& also conducted an online survey of 466 innovation leaders around the world. The companies participating in the survey represent more than US$91 billion in R&D spending, or 13.5 percent of this year’s total Global Innovation 1000 R&D spending.

For more information please visit A copy of the study findings by geography and industry are available from the media contact. Additional multi-media assets including infographics and video are also available.

About Strategy&

Strategy& is a global team of practical strategists committed to helping you seize essential advantage. We do that by working alongside you to solve your toughest problems and helping you capture your greatest opportunities. We bring 100 years of strategy consulting experience and the unrivalled industry and functional capabilities of the PwC network to the task. We are part of the PwC network of firms in 157 countries with more than 195,000 people committed to delivering quality in assurance, tax, and advisory services.


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