Asian tigers all set to overtake European giants |
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Mon, 24 Oct 2005 14:35
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Asian tigers led by South Korea are set to dominate the 21st century in terms of technical know how and scientific research. The Asian economies are pumping in a huge amount of money on research and development. In sharp contrast, Europe has been left behind by miles. The R&D spending for Asia and the US was a good 7 percent as against a mere 2 percent for Europe.
Among the top 1000 companies in the world, LG Electronics, Hyundai Motors and Samsung Electronics top the list. South Koreas planned and sustained investment in R&D was a whopping 40 percent.
Japan was way behind with a mere 4 percent. The European dream of emerging as the most technically advanced union by 2010 may remain a mere dream, thus demolishing the hopes of the Lisbon Agenda. A lot of thought is going in to what could have possibly gone wrong.
The last four years have not been very impressive for Europe in terms of R&D spending while the American companies have been spending a whopping 12 percent on their R&D for the same number of years. The top thousand companies in the world have spent around 220 billion pounds as against 17 billion pounds for Britain. The top thousand companies have increased their R&D investment by 5 percent where as for Britain the R&D spending has gone down by 1 percent.
Although new tax schemes have been introduced by Britain to favour their own companies, the firms have not been able to take advantage of these measures. UK companies still lag behind their international rivals in terms of entrepreneurship and innovation. The UK companies spent only 2 percent of their turnover on R&D where as its rivals spent a good 3.8 percent of their turnover.
The majority of the companies in the UK belong to core industries like food processing, telecom and oil where the capital expenditure and turnover are very high but the R&D spending is very low.
Overall the industrial sector presents a very grim picture. There was a decline in spending in 19 industrial sectors and only 10 industrial sectors sowed a marginal increase. In the past, spending on IT hardware and software was very less. But now the R&D spending in these fields has increased. The strong industrial sectors of UK like pharmaceuticals and aerospace have reported much better spending.
Daimler Chrysler and the US drugs major Pfizer emerged as the world’s largest R&D spenders, each with an investment of 4 billion pounds. GlaxoSmith Kline emerged as the highest spending UK Company on R&D with an investment of 2.8 billion pounds.
But its world ranking among the investment majors was a modest eleventh. The emergence of firms from countries like Taiwan and South Korea indeed poses a threat to UK. The only consolation for UK is that the Asian majors China and India do not figure in the major R&D investors list.
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