Silicon Valley is still where it’s at in terms of R&D.

Yes, the region has cut roughly 45,000 tech jobs since 2022, but its dominance in research and development remains unchallenged, based on data from The 2023 EU Industrial R&D Investment Scoreboard.

And despite the layoffs, many tech companies have reported significant revenue growth. NVIDIA is a case in point. As of June 2024, the AI-focused company has become the most valuable company in the world, surpassing both Microsoft and Apple to hit a market capitalization of roughly $3 trillion. Google has also seen sizable revenue jumps while San Francisco has emerged as a global AI hub.

The continued rise of East Asia

While Silicon Valley remains unique in terms of R&D density, East Asia as a whole is home to more R&D-focused companies than any other geography.

The region is home to 41% of the R&D companies in the EU Industrial R&D Investment Scoreboard’s companies. The roughly 1,000 Asian companies collectively invested $433.89 billion in R&D, accounting for 32.13% of global R&D spending. While this falls beneath North America’s 42.75% share, East Asia’s R&D ecosystem is noteworthy for its continued growth and diversity.

Asia is home to Huawei Investment & Holding, which leads the region in R&D investment, with $22.60 billion in 2023. Next in line are Samsung Electronics with $19.89 billion, and Toyota Motor, with $9.52 billion.

And despite economic uncertainties, the R&D sector remains resilient with the Asian Development Bank forecasting growth of 4.8% in 2024 and 4.5% in 2025 for China, while it projects Southeast Asia will grow by 4.6% in 2024.

In the interactive globe before, you can zoom in (to some degree). Clicking on an entry while reveal the company name and their R&D spending in 2023 in the Euro amount cited in The 2023 EU Industrial R&D Investment Scoreboard.

The top 10 R&D spenders in East Asia

East Asia’s 1,031 R&D-focused companies collectively invested $433.89 billion in research and development, accounting for 32.13% of global R&D spending. With an average R&D intensity of 68.2% and a one-year growth rate of 20.7%, the region shows a strong commitment to investing in innovation. While there are a few notable R&D powerhouses in India such as Tata Consultancy Services, East Asia is home to a significantly greater number overall. Here are the top 10 R&D spenders there:

• Huawei Investment & Holding ($22.60 billion)
• Samsung Electronics ($19.89 billion)
• Toyota Motor ($9.52 billion)
• Alibaba Group (estimated $8.5 billion)
• Sony Group (estimated $7.5 billion)
• Tencent (estimated $6.5 billion)
• Hon Hai Precision Industry (Foxconn) (estimated $5.5 billion)
• Baidu (estimated $5.0 billion)
• Nissan Motor (estimated $4.5 billion)
• Panasonic Holdings (estimated $4.0 billion)

In terms of hubs in the region, the region between Shenzhen and Guangdong is one of the largest. It is home to Huawei Investment & Holding, the top R&D spender in Asia ($22.60 billion). Another large hub stretches between Seoul and Gyeonggi, which is home to South Korea’s R&D leaders Samsung Electronics, the second-largest R&D spender in Asia ($19.89 billion). In Japan, there is Tokyo and Yokohama, which Includes Toyota Motor ($9.52 billion), Sony and Nissan Motor ($4.5 billion).

Other East Asian hubs include the Beijing-Zhongguancun Science Park with $40.21 billion in R&D spending across 82 companies, including Baidu. The Shanghai-Hangzhou area is another sizable hub,  which is home to e-commerce leader Alibaba Group. Taiwan’s contribution to the region’s R&D landscape is primarily centered in the Greater Taipei area, with companies such as Hon Hai Precision Industry, also known as Foxconn, investing heavily in R&D.

North America remains the world’s R&D powerhouse

While East Asia boasts the highest number of R&D-focused companies, North America remains the global leader in overall R&D spending. With $577.43 billion invested in R&D in 2023, accounting for 42.75% of the global total, the region’s more than 800 companies in the ranking of 2,500 continued to show resilience. U.S. R&D expenditures increased by 89% from 2011 to 2021, outpacing growth in countries like France and Germany.

The region’s R&D landscape is dominated by several key hubs:

1. Silicon Valley: The leader, mentioned at the outset of this article, spent $213.83 billion in R&D spending across 178 companies.
2. New York-New Jersey Corridor: A strong second with $50.20 billion in R&D spending and 88 companies.
3. Boston-Cambridge Area: A biotechnology powerhouse, investing $33.70 billion across 104 companies.
4. Seattle-Redmond Area: Home to tech giants like Microsoft, the region spent $32.10 billion on R&D across only 15 companies.

The top 10 R&D spenders in North America are:

1. Alphabet ($40.02 billion)
2. Meta ($34.09 billion)
3. Microsoft ($27.58 billion)
4. Amazon (estimated $42.7 billion)
5. Apple (estimated $21.91 billion)
6. Intel (estimated $16.9 billion)
7. Johnson & Johnson (estimated $13.85 billion)
8. Pfizer (estimated $11.4 billion)
9. Ford Motor (estimated $7.8 billion)
10. General Motors (estimated $7.3 billion)

Europe rounds out the top three

Europe, while trailing behind North America and East Asia in total R&D spending, presents a diverse and robust innovation ecosystem. With 521 companies investing $317.99 billion in R&D, Europe demonstrates a continued focus on R&D though the standings of several large European companies have fallen relative to international peers in recent years. Evidence of this comes, for instance, in life sciences where Roche and Novartis have lost competitive standing to American companies such as Merck and Pfizer in recent years, even as the latter grapples with the fallout of plunging COVID-19 vaccine demand.

Key European R&D hubs include:

1. German Automotive Triangle (Stuttgart-Munich-Wolfsburg): Home to major automotive R&D investments such as Volkswagen and Mercedes-Benz Group AG.
2. Paris-Saclay Cluster: A center for aerospace and pharmaceutical research.
3. Basel-Zurich Life Sciences Corridor: A continued giant in pharmaceutical and biotechnology R&D.
4. London-Cambridge-Oxford Triangle: Known for fintech and biotech innovation.

Europe’s average R&D intensity of 241.2% and one-year growth rate of 19.5% reflect a steady and sustained investment in innovation.

The top 10 R&D spenders in Europe, based on available data and estimates, are:

1. Volkswagen ($20.44 billion)
2. Roche ($15.46 billion)
3. AstraZeneca (estimated $9.0 billion)
4. Daimler (estimated $8.6 billion)
5. Sanofi (estimated $7.4 billion)
6. Siemens (estimated $7.0 billion)
7. GlaxoSmithKline (estimated $6.9 billion)
8. BMW Group (estimated $6.8 billion)
9. SAP (estimated $5.6 billion)
10. Bayer (estimated $5.4 billion)