Multinational corporations like Microsoft usually stumble upon new innovations via research and development (R&D), but it’s not always easy to judge how innovative a company is based on how much they put into R&D, since those two factors are not correlated. Though it’s still interesting to see the figures.
Based on accumulated research from Bloomberg, Capital IQ and Strategy&, what you see in the image below is the ranking of companies from a range of different industries based on their R&D spending. Microsoft is currently in 4th position, having climbed up from 5th the year before. With a spending budget of $10.4 billion, this places the software giant above Google, Amazon, IBM, Apple, and just below Intel that spend $10.6 billion this year.
It’s important to consider the breadth of products a company offers when looking at the R&D figures. For example, Samsung ranks second, likely since they’ve got their fingers in a range of different electronics segments; personal computing, home appliances, network and security systems, medical equipment, shipbuilding, you name it. As does first place Volkswagen, parent company of Audi, Lamborghini, Bentley, Bugatti and a range of other can brands, all focusing on different market segments to research for.
But Microsoft on the other hand, is only focused on hardware and software solutions; Surface, Xbox, Lumia, Windows, Azure, Visual Studio etc., yet it spends only $3 billion less than Samsung. I guess you could count the $7.2 billion acquisition of Nokia’s Devices & Services unit a R&D investment, considering the company was completely new to the hardware development of smartphones.
It good to see Microsoft investing well in R&D, although, how long it will take to finally see and experience the fruits of the company’s efforts is an entirely different story.