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20/10/2003
R&D investment benefits share performance
Companies which invest heavily in research and development have outperformed the rest of the stock market in recent years, the department of trade and industry has claimed.
The DTI's annual 'Research and Development (R&D) Scoreboard' found that the overall share value of the 10 most R&D-intense companies on the FTSE 100 has been higher than the FTSE 100 index every year since 1997. A portfolio of shares bought in those companies would now be worth 30% more than in 1997, in contrast to the 15% drop in value of the FTSE 100 index in the same period.
Science and Innovation Minister, Lord Sainsbury said: "The Scoreboard confirms again that R&D is the key to economic success. R&D helps create the innovative products and services that UK businesses need to compete on the global stage.
"We invest heavily in our science base and encourage business to turn this cutting edge research into economic success. The 'Innovation Review' will also report soon and identify new ways to strengthen the UK's innovation performance."
The Scoreboard looks at data for the top 700 UK and top 700 international R&D investing companies. It found that: the UK has the fourth largest number of companies in the international top 700, after the US, Japan and Germany; for the 700 UK companies, 40% of R&D is in the 'pharmaceutical & biotechnology' sector, and 9% is in 'aerospace and defence'; the UK invests in R&D above international levels in the sectors of 'pharmaceuticals and biotechnology', 'aerospace and defence', and 'health', but is below international levels in most other sectors; compared with middle-sized companies (sales up to $500 million) in the 'US 1000', UK companies of the same size are not investing enough in R&D.
Author of the report Dr Mike Tubbs, a senior industrialist with the DTI Business Finance & Investment Unit, said: "The Scoreboard is written as an international benchmarking tool to help companies decide if they are investing in R&D at the right level, as part of their overall business strategy, and in comparison to their competitors.
"It also highlights those sectors, for example pharmaceuticals and biotechnology, in which the UK needs to maintain its leading position, and those where the UK could be looking to improve."
(gmcg)
The DTI's annual 'Research and Development (R&D) Scoreboard' found that the overall share value of the 10 most R&D-intense companies on the FTSE 100 has been higher than the FTSE 100 index every year since 1997. A portfolio of shares bought in those companies would now be worth 30% more than in 1997, in contrast to the 15% drop in value of the FTSE 100 index in the same period.
Science and Innovation Minister, Lord Sainsbury said: "The Scoreboard confirms again that R&D is the key to economic success. R&D helps create the innovative products and services that UK businesses need to compete on the global stage.
"We invest heavily in our science base and encourage business to turn this cutting edge research into economic success. The 'Innovation Review' will also report soon and identify new ways to strengthen the UK's innovation performance."
The Scoreboard looks at data for the top 700 UK and top 700 international R&D investing companies. It found that: the UK has the fourth largest number of companies in the international top 700, after the US, Japan and Germany; for the 700 UK companies, 40% of R&D is in the 'pharmaceutical & biotechnology' sector, and 9% is in 'aerospace and defence'; the UK invests in R&D above international levels in the sectors of 'pharmaceuticals and biotechnology', 'aerospace and defence', and 'health', but is below international levels in most other sectors; compared with middle-sized companies (sales up to $500 million) in the 'US 1000', UK companies of the same size are not investing enough in R&D.
Author of the report Dr Mike Tubbs, a senior industrialist with the DTI Business Finance & Investment Unit, said: "The Scoreboard is written as an international benchmarking tool to help companies decide if they are investing in R&D at the right level, as part of their overall business strategy, and in comparison to their competitors.
"It also highlights those sectors, for example pharmaceuticals and biotechnology, in which the UK needs to maintain its leading position, and those where the UK could be looking to improve."
(gmcg)
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