In this article, we will be taking a look at the 20 largest R&D companies in the world. If you want to go straight to the top five companies, you can go directly to see the 5 Largest R&D Companies in the World.

Research and Development (R&D) refers to activities that organizations, including businesses and governments, engage in to innovate processes, services, or products. If more R&D means more innovation, 2022 was the best year because, according to a United Nations (UN) report, global patent application rose to over 278,000. The report notes that the patent applications represent the “highest number ever recorded in a single year”.

But the sudden influx of new patent applications does not come out of thin air. For example, according to the Global Innovation Index (GII) 2022, the number of scientific articles – usually, the results of R&D are communicated through scientific articles – crossed the 2 million market for the first time in 2021. This suggests that much more money has been spent in the past few years to fund researchers. Their studies are only starting to generate positive returns. But who is funding the R&D?

Both governments and private sector fund scientists to help them answer specific questions or solve a particular problem. From a general perspective, investment in innovation has grown tremendously over the past two decades. For example, according to the United States’ National Science Board, global R&D expenditure in 2000 was around $726 billion, but the value tripled to approximately $2.4 trillion in 2019. While the US has led the global R&D expenditure (on country basis) for many decades, this lead has been increasingly narrowing. For example, the US share of global R&D expenditure was 37.1% in 2000, 29.0% in 2010, and 27.3% in 2019.

A similar dynamic is taking place in the private sector. Two decades ago, there was no company outside the US and the EU that competed among the top R&D spenders in the world. But the picture is different, especially in the past decade where more companies from Asia (particularly India and China) allocate a considerable part of their revenue to innovation. According to the latest Global Innovation 1000 study – this is PwC research conducted once every five years, the latest report was released in 2018 – corporates spend huge sums every year on R&D. Most of the leading companies in this ranking are also the most valuable globally. They are able to expend billions annually to R&D because their huge revenues. Also, the research reveals that the world’s top corporate innovators are overwhelmingly technology, motor vehicle, and biotechnology/pharmaceutical companies.

Our Methodology

We chose 20 companies with highest R&D spending. This ranking of the world’s 20 largest R&D companies relies on the latest published annual reports of the companies for the calendar year 2022. When companies quoted R&D expenditure in currencies other than US dollars, we converted the figures to into USD using the exchange rate on December 31, 2022.

Largest R&D Companies in the World

20. AstraZeneca PLC (NASDAQ:AZN)

R&D spending in FY2022: $9.762 billion

AstraZeneca focuses on oncology, biopharmaceuticals, and vaccines. The company spent about $9.762 billion on R&D in 2022, which was slightly higher than 2021. Some of its research and development expenses were related to developing new medicines for cancer, cardiovascular diseases, respiratory diseases, immunology, rare diseases, and other areas. It also developed a COVID-19 vaccine in collaboration with Oxford University, which was approved by several countries and the World Health Organization.

19. Toyota Motor Corp. (NYSE:TM)

R&D spending in FY2022: $9.79 billion

Toyota Motor is a Japanese multinational automotive company that produces and sells vehicles under four brands: Toyota, Lexus, Daihatsu and Hino.

18. Meta Platforms, Inc. (NASDAQ:META)

R&D spending in FY2022: $9.8 billion

Meta Platforms, formerly known as Facebook, is an American multinational technology company that was founded in 2004. It owns various social media platforms and services, such as Facebook, Instagram, WhatsApp, Messenger, and Meta Quest. It also has interests in artificial intelligence, virtual reality, augmented reality, cloud computing, and other domains. Meta Platforms spent about $9.8 billion on R&D in 2022, which was an increase of 38.67% from 2021.

17. General Motors Company (NYSE:GM)

R&D spending in FY2022: $9.80 billion

General Motors Company is an American multinational automotive manufacturing company that was founded in 1908. It produces vehicles under various brands, such as Chevrolet, Buick, GMC, and Cadillac.

16. Novartis AG (NYSE:NVS)

R&D spending in FY2022: $10 billion

Novartis is a Swiss multinational pharmaceutical company that was founded in 1996. It focuses on oncology, biopharmaceuticals, and generics. The company spent about $10 billion on R&D in 2022. The money went to developing new medicines for malaria, neglected tropical diseases, cancer, cardiovascular diseases, respiratory diseases, immunology, rare diseases, and other areas. It also pledged to invest $250 million in R&D for the treatment of malaria and neglected tropical diseases over the next five years.

15. Merck & Co Inc. (NYSE:MRK)

R&D spending in FY2022: $10.1 billion

Merck is an American multinational pharmaceutical company that develops and produces medicines, vaccines, biologic therapies and animal health products. It was founded in 1891 as the American subsidiary of the German company Merck Group, which it became independent from in 1917. Merck spent $10.1 billion on R&D in 2022, an increase from $9.9 billion in 2021.

14. Mercedes-Benz Group (OTCMKTS:MBGYY)

R&D spending in FY2022: $10.66 billion

Mercedes-Benz Group AG is a German multinational automotive corporation that produces and distributes premium and luxury cars, vans, trucks and buses.

13. Bristol-Myers Squibb Company (NYSE:BMY)

R&D spending in FY2022: $11.1 billion

Bristol-Myers Squibb is an American multinational pharmaceutical company that manufactures prescription pharmaceuticals and biologics in several therapeutic areas, such as cancer, HIV/AIDS, cardiovascular disease, diabetes, hepatitis, rheumatoid arthritis, and psychiatric disorders. The company spent $11.1 billion on R&D in 2022, a slight decrease from 11.4 billion in 2021.

12. Pfizer, Inc. (NYSE:PFE)

R&D spending in FY2022: $11.4 billion

Pfizer is one of the world’s premier biopharmaceutical companies that develops and produces medicines and vaccines for various diseases. It was founded in 1849 in New York, United States. One of its most notable products is the Pfizer-BioNTech COVID-19 vaccine, which has been authorized for emergency use in many countries.

11. Johnson & Johnson (NYSE:JNJ)

R&D spending in FY2022: $14.603 billion

Johnson & Johnson (J&J) is a US-based multinational corporation that operates in three segments: consumer health, pharmaceuticals and medical devices. The company’s expenditure on R&D in 2022 was $14.603 billion, a 0.75% decline from 2021. J&J’s R&D spending represented 12.9% of its total revenue in 2022, down from 13.6% in 2021.

10. Roche Holding AG (OTCMKTS:RHHBY)

R&D spending in FY2022: $15.15 billion

Roche is a Swiss-based multinational healthcare company that operates in three divisions: pharmaceuticals, diagnostics and diabetes care. Its expenditure on R&D in 2022 was CHF14.05 billion (about $15.15 billion), a 2.7% increase from 2021. Roche’s R&D spending represented 22% of its total revenue in 2022, down from 23% in 2021. The main R&D areas include oncology, immunology, neuroscience, infectious diseases and rare diseases.

9. Alibaba Group (NYSE:BABA)

R&D spending in FY2022: $17 billion

Alibaba is a Chinese multinational e-commerce, technology, and entertainment company founded in 1999. It operates various online platforms, such as Alibaba.com, Taobao, Tmall, AliExpress, Alipay, Alibaba Cloud, and others. It also has interests in media, entertainment, logistics, health care, and other sectors. Alibaba spent approximately 110.5 billion yuan (about $17 billion) on R&D in 2022, which was an increase of 19% from 2021. The funds went to artificial intelligence, cloud computing, e-commerce, payment systems, logistics, digital media, and online services research.

8. Volkswagen Group (OTCMKTS:VWAPY)

R&D spending in FY2022: $17.1 billion

Volkswagen is a German multinational automotive company that produces passenger cars, commercial vehicles, motorcycles and engines. Volkswagen’s total R&D costs in the automotive division in 2022 amounted to $17.1 billion, which represented 7.6% of its revenue. This expense increased by 12.2% compared to 2021, reflecting its focus on electrification, digitalization, new technologies and modular platforms. Volkswagen filed 5,638 patent applications worldwide for employee inventions in 2022, mainly in Germany, and in fields such as driver assistance systems, automation and connectivity, and alternative drive systems.

7. Intel Corporation (NASDAQ:INTC)

R&D spending in FY2022: $17.53 billion

Intel is a US-based multinational corporation that develops and manufactures microprocessors, chipsets, memory, storage, software and other technologies. Its R&D expenses for 2022 were $17.528 billion, a 15.39% increase from 2021. The expense represented 23% of its total revenue in 2022, up from 21.8% in 2021. The main R&D areas include process technology, packaging technology, CPU architecture, GPU architecture, AI accelerators, memory and storage solutions, software and security.

6. Tencent Holdings ADR (OTCMKTS:TCEHY)

R&D spending in FY2022: $17.7 billion

Tencent is a Chinese multinational technology and entertainment company founded in 1998. It is the world’s largest video game vendor and one of the most valuable companies. It provides various internet-related services and products, such as social networks, music, web portals, e-commerce, mobile games, internet services, payment systems, smartphones, and multiplayer online games.  The company spent about 114.5 billion yuan (about 17.7 billion U.S. dollars) on R&D in 2022, which was an increase of 28% from 2021. Some of the expenditure was related to artificial intelligence, cloud computing, automation, search engine, social networking, instant messaging, mass media, web browser, antivirus software, music, payment system, film production, video games, and online services.

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Disclosure: None. 20 Largest R&D Companies in the World is originally published on Insider Monkey.