Innovation is one of the important attribute’s of the world’s leading companies. High investment in research and development (R&D) leads to great innovation. Hence one way to evaluate top quality firms is to focus on their R&D budgets. Firms that lag in innovation are easily left behind in today’s hyper competitive market. Highly successful firms are generally leaders in innovation. For example, a drug firm cannot a global leader without innovation.

With that said, the top 20 firms in R&D are shown in the table below. These firms are from the top 100 MNEs list published in the World Investment Report by UNCTAD.

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Source: The World Investment Report 2019 , UNCTAD

A few observations:

• The top five global R&D leaders Amazon(AMZN), Alphabet(GOOG), Samsung, Huawei and Microsoft(MSFT).
• As usual, US firms dominate the list accounting for nearly half of them.
• All the Top 7 companies are in the tech sector, This shows the importance of R&D in this sector.
• The pharma sector has five firms in this list with all of them from the US and Europe.
• Except Huawei all the other companies from the developed world.
• Firms from developing countries have a long way to go before they can be world leaders in R&D.

Disclosure: No Positions