UK electronics R&D up but still small beer internationally - Embedded.com

UK electronics R&D up but still small beer internationally

LONDON — The majority of UK electronics companies with an R&D spend over £5million, increased R&D in 2003 over the previous year. Of the top 20 companies, 13 increased investment with 12 of the 20 being UK-owned and eight of these increasing R&D over the previous year.

The UK electronics sector accounts for 3.6% of UK 700 R&D whereas the sector is the fourth largest internationally with 10.8% of international 700 R&D. Only one UK electronic & electrical company is large enough to be in the international 700; this is Invensys.

The figures come from this year’s R&D Scoreboard which is designed primarily as a benchmarking tool and has been published every year since 1991 for use by companies, investors and policy makers. It is published by the Business Finance & Investment Unit within the Innovation Group of the DTI.

The overall business environment for R&D-active companies was much more favourable in 2003/04 than in the previous two years. Overall operating profit doubled to reach 8.2% of sales and both sales and R&D increased over the previous year. These increases were particularly marked for companies in the Americas and also Asia Pacific but European companies showed a small reduction of 1% in both sales and R&D. The larger UK companies showed an increase in sales and a small increase of 1% in R&D.

The Americas (primarily the USA) have the largest proportion of international 700 R&D (39.5%) and the highest R&D intensity (4.9% of sales). Europe has almost as large a proportion (36%) but a smaller R&D intensity (3.7% of sales) while Asia-Pacific has the lowest proportion (24.6%) but an intensity of 4%.

The UK has relative overall weakness in the IT hardware, software & computer services and electronics & electrical sectors but also has a vigorous set of smaller companies in these areas – particularly in software. These smaller companies need the best possible environment for growth (such as access to finance) to ensure they can grow at their highest potential rate and hence add to the number of R&D-active companies in these areas with sales over £500million.

Ranking of Top 10 Electrical and Electronic Companies by R&D Investment for the UK

table

Company

R&D £million

Change %

Sales £million

Change %

Intensity R&D % of sales

Electronic & electrical – sector total

581.06

– 8

22740

– 1

2.6

Invensys

165

-26

3891

-22

4.2

Agilent Technologies

75.9

-9

390

-46

19.5

Philips Electronics

62.5

0

779

-7

8

Spectris

34.1

15

568

16

6

Siemens

28.9

22

2652

2

1.1

Alstom

25.84

n/a

1126

n/a

2.3

Samsung Europe

14.57

29

1784

4

0.8

Renishaw

14.25

2

111

6

12.9

Matsushita Electric Europe

13.36

>999

5144

66

0.3

Oxford Instruments

12.67

-4

187

-12

6.8

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