BT ranked among leaders for R&D

BT has been ranked fourth largest investor in research and development in the UK in the 17th annual edition of the R&D Scoreboard published yesterday.

BT has been ranked fourth largest investor in research and development in the UK in the 17th annual edition of the R&D Scoreboard published yesterday.

Only GlaxoSmithKline, AstraZeneca and BAE Systems put more money into R&D in 2006.

The telecommunications giant, which has its prime R&D site at Adastral Park, Martlesham, near Ipswich, was also found to have increased its spend in R&D by more than any other UK company last year - up by 54% to £1.1 billion, representing 5.5% of sales. In 2003, the company spent 2% of its sales revenue on R&D.

Not surprisingly, BT led the way in the fixed line telecommunications sector in the UK where it accounted for 99% of R&D spend. Globally, BT came second in the sector to Japanese firm NTT which spent £1.3 billion on R&D, although as a percentage of sales NTT's investment was lower than BT's at 2.9% of sales.

Although classified as “fixed line” telecommunications, companies in the sector generally sell a mix of services, including fixed voice, broadband, mobile, Pay-TV and IT services. BT's uplift in R&D investment in recent years reflects the growing importance of its IT services offer for business customers, with £741 million of last year's spend going on capitalised software development and £378 million on R&D operating costs.

The 2007 R&D Scoreboard looks at the top 850 UK companies and top 1,250 global companies by R&D investment. Compiled by the Department of Innovation, Universities & Skills in collaboration with the Department for Business, Enterprise & Regulatory Reform, the scoreboard is an international league table of companies investing most in R&D and is designed to act as a benchmarking tool for companies, investors and policy-makers.

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Mike Carr, chief science officer at BT Group, said the scoreboard data reference was valuable in giving confidence to the group's shareholders.

“BT has moved rapidly from being a telephone company and has become a significant broadband and global ICT player,” he said. “Without wide shareholder awareness of the metrics involved, our substantial year-on-year R&D increase might have been difficult to understand.”

In the UK, five sectors dominated last year's R&D spend, accounting for almost two thirds of overall spend - pharmaceuticals & biotechnology (35%), aerospace & defence (11.4%), software & computer services (5.8%), fixed line telecommunications (5.4%) and automobiles & parts (5.2%).

Key Facts from the 2007 R&D Scoreboard

· The 850 UK companies that invest the most in R&D spent £20.9 billion in 2006, compared with the £19.1 billion they put into R&D in 2005

· 83% of UK R&D is conducted by the hundred most active companies

· More than half of R&D activity by the 75 UK companies represented in the Global 1250 takes place in the pharmaceuticals and aerospace sectors

· Globally, the 1,250 companies most active in R&D invested £244 billion in 2006-7, an increase of 10% on the previous year; the 75 UK companies in this group increased their R&D spend at a faster rate - 12%

· More than 81% of global R&D occurs in five countries - USA, Japan, Germany, France and the UK

· Global R&D intensity (R&D expenditure as a proportion of sales) has remained broadly constantly at 3.5%