Canada’s Source of R&D Intelligence
Toronto - October 28, 2004 - Corporate spending on R&D in Canada declined for the second year in a row. In fiscal 2003, Canada's top R&D companies invested nearly $10.6 billion in research and development activities, down (-5.1%) from 2002, according to Canada's Top 100 Corporate R&D Spenders List 2004, released today by Research Infosource Inc. This 2-year decline that began in 2002 comes on the heels of 5 straight years (1996-2001) of spending increases.
Nortel Networks remains in 1st 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 were used for our calculations.). Bell Canada moves into 2nd place from 6th with $1 billion in spending - a jump of 20.5%. Even with a 9.7% increase in R&D investment from $574.8 million to $630.7 million, Magna International slips from 2nd place to 3rd. Posting a slight (-1.2%) decrease in spending from $428 million to $423 million, Pratt and Whitney Canada is in 4th place down from 3rd. ATI Technologies moves into 5th place from 7th 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%.
For fiscal 2003, 8 companies (Petro-Canada, Labopharm, ID Biomedical, Genpharm, AEterna Laboratories, Vasogen, Cardiome Pharma Honeywell) increased their R&D spending by more than 50%. Petro-Canada, Labopharm and ID Biomedical posted increases in excess of 100%.
"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 seemreluctant 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."
Looking at R&D spending across industry sectors, Nortel's mammoth R&D expenditures put the communications/telecommunications equipment sector into 1st place with 33% of Top 100 spending in fiscal 2003. The pharmaceutical/biotechnology sector came 2nd with 16% of spending. Led by Bell Canada's significant increase in R&D investment, the telecommunication services sector was 3rd. Software and computer services was 4th, and Aerospace was 5th. Without Nortel's influence, the pharmaceutical/biotechnology sector jumps into the top spot with 21% of all Top 100 spending, while communications/telecommunications equipment drops to 5th place.
Breaking Top 100 R&D spending down by province for fiscal 2003, the 48 companies headquartered in Ontario accounted for $6.4 billion or 61% of the total. This represents a decrease of (-8.1%) from fiscal 2002. Québec's 26 companies spent $3.02 billion, representing 29% of total expenditures, an increase of 2.3%. The 16 British Columbia-based firms invested $788.5 million, 7% of the total and a decrease of (-5.6%). The 8 Alberta firms accounted for $282.3 million or 3% of Top 100 spending and posted a decrease of (-5.7%) from 2002. Removing Nortel from the Ontario calculations, 47 companies invested $3.6 billion, 47% of the total, an increase of 4.2%.
The complete Canada's Top 100 Corporate R&D Spenders List 2004 and more regional information is available on the Research Infosource website, www.researchinfosource.com. An in-depth Canada's Top Corporate R&D Spenders Report 2004, based on over 650 companies, is slated for publication in November 2004. Research Infosource Inc., a division of The Impact Group, is Canada's source of R&D intelligence. Drawing from an extensive database, Research Infosource Inc. publishes Canada's Top 100 Corporate R&D Spenders List, Canada's Top 50 Research Universities List, and specialized reports.
Information: Ron Freedman, CEO, Research Infosource Inc. (416) 481-7070 ext. 31
Janet Sandor, Director of Communications (416) 481-7070 ext. 25