R&D spending in decline

Corporate spending on R&D in Canada declined for the second year in a row, according to Research Infosource Inc, which recently released its “Canada’s Top 100 Corporate R&D Spenders List 2004“. The two-year decline comes on the heels of five straight years of spending increases.

In fiscal 2003, Canada’s top R&D companies invested nearly $10.6 billion in research and development activities, down 5.1% from 2002.

Nortel Networks remains in first place on the Top 100 List with estimated R&D expenditures of $2.8 billion in fiscal 2003, a drop of 20.4% from 2002. (Nortel figures are not final. The best data available at press time were used for our calculations.). Bell Canada moves into second place from sixth with $1 billion in spending – a jump of 20.5%.

“In 2003, 55 firms, over half of the Top 100 companies cut back or held the line on R&D spending”, explained Ron Freedman, CEO of Research Infosource Inc. “By contrast, in 2002, only 34 firms reduced their R&D investment. Although corporate profits have increased for 8 of the last 9 quarters, companies seem reluctant to reinvest in R&D activities. Focus appears to have shifted from the comprehensive innovation strategy launched two years ago by the federal government to the more narrow commercialization of university research.”

Even with a 9.7% increase in R&D investment from $574.8 million to $630.7 million, Magna International slips from second place to third. Posting a slight (-1.2%) decrease in spending from $428 million to $423 million, Pratt and Whitney Canada is in fourth place down from third. ATI Technologies moves into fifth place from seventh, spending $329 million on R&D in fiscal 2003, up 14.9% from $286.4 million in fiscal 2002.

For fiscal 2003, 21 companies made Research Infosource’s $100 Million Club (companies that spend $100 million or more on R&D), accounting for 73% of Top 100 spending, or $7.7 billion. Including Nortel’s results, spending by the $100 Million Club dropped (-6.1%) from 2002. However, removing Nortel from the equation, the Club posted an increase of 4.5%.

Related Download
CanadianCIO Census 2016 Mapping Out the Innovation Agenda Sponsor: Cogeco Peer 1
CanadianCIO Census 2016 Mapping Out the Innovation Agenda
The CanadianCIO 2016 census will help you answer those questions and more. Based on detailed survey results from more than 100 senior technology leaders, the new report offers insights on issues ranging from stature and spend to challenges and the opportunities ahead.
Register Now