R&D expenditures will grow, less in new physical centers, but more via acquisitions, alliances/joint programmes and open innovation contracts. Steering R&D is changing: a more clear split is expected between Research locations and Development locations. The future R&D landscape will consist of a few cross industry hot spots around the world and specialized industry specific satellites.

These are three conclusions from a major study, conducted by Buck Consultants International and sponsored by the Paris Region Economic Development Agency (France); Flanders Investment & Trade Agency; Wallonia Export & Investment (both Belgium); BOM Foreign Investments (Brabant - The Netherlands) and Locate in Kent (United Kingdom). Besides desk research the study consisted of 24 interviews in the life sciences, high tech and ICT industries. Chief Technology Officers and Global Heads of R&D participated in this research. Participants were

  • Life sciences: Celgene, Johnson & Johnson, Lilly, Lundbeck, Merck, Pfizer, Sanofi, Teva
  • High tech: Boeing, BYD, Canon, General Electric, Hitachi, Mitutoyo, Siemens, Xerox
  • ICT: Fujitsu, IBM, Intel, Microsoft, SAP, Symantec, Wipro, Xilinx

Growth of R&D

Global data on R&D expenditures still show a growth, despite the economic downturn in some regions of the world. In terms of R&D expenditures Europe is relatively stable, Asia-Pacific shows a 10% increase between 2011 and 2013. Particularly the large life science and high tech companies spend less R&D money in Europe. However, ICT companies all show a growth in R&D spendings in Europe. “In Europe companies will operate less physical R&D centers, but larger sometimes consolidated R&D centers”, says Mathijs Pronk, senior consultant at Buck Consultants International. Joint R&D programmes and open innovation do not require a larger number of research centers. This study shows that in the day-to-day R&D world a split becomes visible between R(esearch) locations and D(evelopment) locations. The research locations are chosen for their scientific excellence and high skilled talent base. The development locations are chosen by the business lines/divisions and focus on emerging markets in Asia and Latin America.


Europe is loosing ground for hosting (new) R&D centers. Many companies in all three sectors of industry keep the size of their R&D centers at best stable in this region. The majority of the R&D centers of the interviewed life science companies even decreases in size. Nearly all companies underline the importance of national R&D policies for establishing and keeping an attractive R&D investment climate: it is not only a race between companies, but also between nations. Most important elements in national R&D policies are, according to the companies interviewed: investments in public R&D (institutes, programmes), fiscal and cash incentives, attractiveness and easy access for global talent.

Future R&D landscape

Around the world a limited number of locations form the (cross-industry) R&D hot spots. Examples are New York, Tokyo, Shanghai, California. In Europe the strongest R&D hot spots are London - Cambridge - Oxford and the larger Paris region. In each region of the world specialized satellites can be found. In Europe for example Basel – Zurich (Switzerland) for life sciences; Dublin (Ireland) for the high tech industry; individual French cities/regions like Grenoble, Toulouse, Sophia Antipolis for the high tech industry and in Scandinavia, Stockholm and Helsinki for the ICT sector.

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