Concentration of research and development.

 

The potential of frontier technologies has attracted significant research and development investments. For example, between 2022 and 2025, AI related investment was expected to double to $200 billion. By comparison, this is about three times the global spending on climate change adaptation. By 2030, AI-related investment could represent 2 per cent of GDP in countries leading in AI. While many companies undertake various forms of R&D, the bulk of investment is by a small number of enterprises. In 2022, more than 80 per cent of business-funded R&D worldwide was carried out by 2,500 companies, which invested €1.25 trillion; 40 per cent of such investment was by only 100 companies.

Among the largest 100 corporate R&D investors, around half are headquartered in the United States, led by Alphabet, Meta, Microsoft and Apple. Around 13 per cent are headquartered in China, led by Huawei and Tencent, up from 2 per cent 10 years ago and overtaking traditional R&D leaders such as Germany, Japan, the Republic of Korea, Switzerland and the United Kingdom (figure I.4). 

Other than China, none of the top 100 corporate R&D investors are from developing countries. The software and computer services industry, in which most AI, big data and blockchain technologies are developed, accounted for around one quarter of the total R&D investment of the top 100 corporate R&D investors in 2022, more than doubling their share from a decade ago and overtaking the pharmaceuticals and biotechnology industry (figure I.5). 

Other leading companies operate in the technology hardware and equipment industry, which includes IoT, 5G networks, 3D printing, robotics, drone technology and green frontier technologies, and accounts for one fifth of the R&D investment. The automobile and parts industry, which includes electric vehicles, still represents a considerable share of R&D investment despite a gradual decrease over the past decade. The software and computer services, technology hardware and equipment and pharmaceuticals and biotechnology industries are largely headquartered in the United States, which accounts for more than 80 per cent of the corporate R&D investment in software and computer services. Germany and Japan lead in such investment in automobiles and parts and the Republic of Korea is strong in electronic and electrical equipment.