The Sectors Which Spent the Most on Innovation in 2020

In order to stay ahead of the game, innovation is key. This is a lesson successful businesses not only recognize but continually apply, and it’s often a key factor in cementing their status and ensuring they remain competitive.

As a result, spending on research and development among big businesses tends to be incredibly high – in some sectors more than others. For companies operating within these fields, yearly expenditure can run into the millions, even billions.

While this may seem an excessive and unnecessary amount to spend, those in the know suggest it often pays off, especially in sectors where uniqueness and innovation are prized. Technology, motoring, and investment are prime examples, with multibillion-pound turnovers and unimaginable amounts of wealth tied up in them.

So which sectors spent the most on research and development in 2020? Here are the four biggest investors for the year to date.

Technology

In the world of technology, innovation is unsurprisingly key. The very reason consumers continually upgrade their devices such as to the latest Samsung Galaxy A42 is to gain access to the latest and most exciting features, so progress must be constant in order to keep the wheels turning. For this reason, it’s not uncommon for the biggest names in the industry to spend billions of pounds per year on research and development, with many of the companies which spent the most on innovation in the last year belonging to this field.

Prime examples include Samsung, Microsoft, Huawei, Intel, and Apple, who spent $14.9 billion, $13.6 billion, $12.5 billion, $12.1 billion, and $10.7 billion respectively. This makes Samsung the top spender on R&D among any industry or sector in the world. Most of the company’s expenditure relates, of course, to their flagship smartphones, with the most recent releases featuring both an innovative intelligent camera and an astonishing one terabyte of storage.

Investment

Another industry that turns on the principle of staying ahead of the game is investment, where not only brokers but traders themselves are continually looking to capitalize on new opportunities. It should thus come as little surprise to learn that the second-biggest spender on research and development belongs to this sector. Investment giant Alphabet has so far spent an astonishing $14.8 billion on developing innovative products in 2020.

To better understand the importance of technology, we can look to the trading and investment sector’s own use of technology. Certainly, new brokers and trading platforms are entering the market all the time and the reviews of them show that customers prize technologically advanced platforms and trading tools. The most competitive brokers usually offering the most innovative and diverse products. These include, for example, mobile-optimized content and a choice of trading platforms (both MT4 and MT5 in the case of the most highly rated names). In fact, such innovation now seems to carry an equal amount of weight as more traditional considerations, like the trustworthiness and/or transparency of investment outfits.

Motoring

Motoring, too, is an industry which turns on the idea that there is always a better product on the market than the one the consumer currently owns. In order to sell this concept to its audience, businesses must therefore ensure that new models are regularly released, in order to continually whet the appetites of their buyers.

For this reason, it makes sense that the industry would spend a large amount of its yearly budget on research and development, and this has been especially evident in 2020, with Volkswagen and Daimler providing prime examples. With outlays of $14.5 billion and $9.6 billion respectively, the automotive sector has shown little signs of slowing its continual onward march toward ever greater progress.

Healthcare

Unsurprisingly, the healthcare and pharmaceuticals industry also spends a lot of money on research and development. Its two biggest spenders are Roche and Johnson & Johnson, with their current yearly expenses amounting to a combined total of $19.5 billion for the first nine months of 2020. This is explained by the desire to make ever greater medical advances, with improvements in healthcare and drug treatments continually being sought. This, naturally, cannot be achieved without first investing large sums of money, with the result being phenomenal industry overheads.

When it comes to spending money on research and development, these four different and diverse fields all understand that in order to accumulate, one must first speculate, and they do not hesitate to do so. Given their phenomenal profits, it seems a lesson can perhaps be taken from this by their smaller counterparts too: that while there is a place for being careful and conservative, only with risk can there truly be reward.

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