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The Price of Knowledge

In the know: German car firms are spending more to find out more.
  • Why it matters

    Why it matters

    • A new study shows that R&D spending is strong among major German companies. Germany is also a world leader in research spending growth, second only to China.
  • Facts


    • Germany’s top 45 companies increased their R&D spending by 11.3 percent in the 2013-2014 fiscal year, compared to only a 1.4-percent increase in research spending worldwide.
    • Half of the research spending among the top 45 companies came from carmakers VW, Daimler and BMW.
    • According to a study by consulting firm Strategy&, major global companies spent a total of $647 billion (€509 billion) on research into new technologies on products last year.
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Sigmar Gabriel’s campaign against corporate Germany’s alleged unwillingness to invest came to a head in September.

The German economics minister complained: “The net investment rate in private companies isn’t strong enough.”

He promptly set up an expert commission to “strengthen investment in Germany.”

But Mr. Gabriel’s criticism is misdirected, as least when it comes to large, publicly traded German companies, which are spending more than ever on their long-term futures.

Germany’s top 45 companies upped spending on research and development (R&D) from July 2013 to June 2014 by 11.3 percent over the same period last year.


Who Invests the Most-02


They spent $55.1 billion, or €43.4 billion, on future-oriented products such as electric cars and new drugs, according to a new study by the consulting firm Strategy&, to which Handelsblatt has gained exclusive access. The study examines the investment activities of 1,000 companies with the highest R&D expenditure worldwide.

The record investment levels by the 45 German companies are especially noteworthy because they run counter to the global trend. Globally, the increase in research spending declined from 3.8 to only 1.4 percent. “Classic industry is making Germany a world leader in innovation,” said Klaus-Peter Gushurts, a spokesman for Strategy&.

The German automobile industry, in particular, is investing heavily in research. Three carmakers alone, VW, Daimler and BMW, spend $26 billion on research, or half of all R&D expenditure among the 45 German companies studied. VW boosted its research spending by 18.9 percent, to $13.5 billion, making it the world’s largest source of R&D spending. Samsung is in second place with $13.4 billion, following by U.S. chip giant Intel, which is investing $10.6 billion.

It is auto industry investment that puts Germany ahead of its European neighbors in research spending.

The development of electric engines and hybrid vehicles, along with laws dictating reductions in carbon dioxide emissions, consume billions. Last year, the three major German automakers pumped a total of $28.6 billion into their research departments, or almost half of the entire German share of R&D spending within the study. At VW, some 44,000 employees worldwide are involved in technical development.

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