Lab Product News
News

Mixed R&D expenditure trends in 2002 for Canada’s top 100 R&D companies


Toronto, ON June 27, 2003 Canada’s top R&D companies invested C$10.9 billion on research and development activities in fiscal 2002, down 8.7% from last year’s figure of $11.9 billion, according to Canada’s Top 100 Corporate R&D Spenders List 2003, released this week by Research Infosource.

Nortel Networks still holds 1st place in R&D spending for fiscal 2002, investing $3.5 billion, down 29.8% from 2001. Magna International ($574.8 million) moves into 2nd spot from 4th with a 60% jump in R&D spending. Pratt and Whitney Canada ($428 million) retains 3rd position even with a slight 2.7% drop in R&D spending. JDS Uniphase ($400.1 million) slips from 2nd spot to 4th after posting a 20.7% decline in R&D investments. IBM Canada ($315.3 million) rounds out the top five with a 26.1% increase in R&D investments from 2001 to 2002.

A closer look at the numbers reveals a rosier picture. Nortel Networks’ results mask a positive underlying trend. With Nortel’s figures included, total spending declined by 8.7%. Removing Nortel’s results from the mix, R&D spending actually grew by 6.5% in 2002.

For fiscal 2002, 24 companies made elite $100 Million Club comprised of companies that spend $100 million or more on R&D up from 23 in 2001. New to this year’s list are Bell Canada, which spent $300 million on research, and Aventis Pasteur, which spent $105.7 million. Members of the $100 Million Club accounted for 76% ($8.3 billion) of total Top 100 spending, slightly down from 79% in Fiscal 2001.

“Canadian companies seem to be heeding the federal government’s innovation message”, says Ron Freedman, president of Research Infosource. “Sixty-five companies on the 2003 list increased their R&D spending in 2003, forgoing short-term boosts to the bottom line, choosing instead to invest in long-term prospects.”

With Nortel’s $3.5 billion in R&D spending, the communications/telecommunication equipment sector posted $4.6 billion of total spending, putting it in first place among industry sectors. Without Nortel, sector spending drops to $1.1 billion, compared with $1.5 billion in pharmaceuticals/biotechnology. The software and computer services sector holds third place with $905.3 million in fiscal 2002.

Six of the top 100 companies posted a dramatic (over 90%) increase in R&D spending in fiscal 2002: (No. 76) Aastra Technologies up 180.7%; (No. 99) Inflazyme Pharmaceuticals up 111.9%; (No. 97) ID Biomedical Corporation up 102.2%; (No. 29) Research In Motion Limited up 95.6%; (No. 69) Theratechnologies up 90.7%; (No. 44) Westport Innovations up 90.5%.

Some high profile companies put the brakes on their R&D spending in 2002 to offset relatively modest drops in revenue. Noranda (No. 81) dropped its research spending by 43.2%, in response to 1.0% decline in revenues. Husky Injection Molding Systems (No. 73) cut its research spending by 37.6%, to counteract a 8.0% fall in revenues, and even though its revenues fell by only 0.8%; Bayer’s Canadian operation, ranked 48th, decreased its research spending by 32.6%.

Looking at the provincial breakdown, 50 of the top 100 companies were headquartered in Ontario. Together they spent $7.7 billion on R&D in 2002, down 14.2% from last year. Quebec’s 24 companies invested $2.1 billion, a 7% increase from 2001. British Columbia’s 16 firms posted $813.8 million in R&D expenditures, a jump of 13.1%. The Prairie provinces (9 Alberta and 1 Manitoba firm) invested $356.8 million, a slight 2.1% drop from 2001.