Companies based in the United States continue to dominate global research and development (R&D) investment, outpacing their European counterparts in both spending and growth rates. According to a recent analysis by consultancy EY, shared with Der Spiegel, the world’s 500 biggest corporate R&D spenders collectively increased their budgets by six percent in 2024.
The report reveals that firms in Asia posted the highest growth in R&D spending with a seven percent increase, followed closely by US-based companies with six percent. European companies trailed slightly behind, with a five percent rise in R&D investments.
The dominance of US firms is particularly evident in the top ten global investors in innovation. EY’s findings show that seven of these companies are headquartered in the United States. Amazon led the pack in 2024 with a budget of nearly €82 billion dedicated to “technology and content” – the closest approximation to R&D spending reported by the company, as it does not disclose separate figures for research.
Second place was taken by Alphabet, Google’s parent company, which spent €45.6 billion on development. Meta Platforms – the owner of Facebook, WhatsApp and Instagram – followed in third with €40.5 billion directed toward research and development.
Europe also made a modest showing in the top ten, with two companies securing places: Germany’s Volkswagen ranked seventh with €18 billion in R&D expenditure, while Swiss pharmaceutical giant Roche came ninth with €16.1 billion.
Growth Slows, But Innovation Strategy Evolves
Despite the increase in R&D investments, the rate of growth has slowed when compared to the previous year. In 2023, companies had boosted their R&D spending by 11 percent. EY’s Henrik Ahlers suggests this reflects a shift in strategic thinking. “Many companies are re-evaluating their innovation budgets. The idea that ‘more is better’ clearly doesn’t hold true anymore,” he explained.
Ahlers emphasised that simply injecting more funds into innovation efforts isn’t sufficient. “To truly become more innovative, companies need to restructure internally to focus on agility and innovation as core principles,” he added.
He highlighted Chinese firms as positive examples in this area, praising their ability to bring new technologies to market at record speed. “In the automotive industry, there’s now talk of ‘China-Speed’ – young Chinese companies have repeatedly stunned industry experts by dramatically shortening development cycles,” Ahlers noted.
German companies, too, are reportedly making efforts to reduce internal red tape, with an increasing number forming partnerships with start-ups and tech firms to drive innovation. These alliances are seen as a promising way to accelerate development and remain competitive in a rapidly evolving global market.
