The R&D World Index (RDWI) for the week ending September 8, 2023, closed at 3,053.76 for the 25 companies in the RDWI. The Index was up 1.09% (or 32.90 basis points). Sixteen of the 25 RDWI members gained value last week from 0.12% (Astra Zeneca PLC) to 5.27% (Eli Lilly & Co.). Nine of the 25 RDWI members lost value last week from -0.18% (IBM) to -6.04% (Alphabet/Google).

The German economy continues to contract, shrinking 0.3% in the quarter ending in June 2023 compared to the same quarter in 2022, according to a report issued last week from the Kiel Institute for the World Economy, Kiel, Germany. The German economy has only grown in one of the past five quarters and is now forecast to shrink 0.3% in the current quarter and 0.5% in 2023. German manufacturing has been in a downturn since 2018, coinciding with the start of a global backlash against open international trade. Inflation is currently weakening their economy with German households buying fewer goods. Overall, German manufacturing in 2023 has declined 1% from the same period in 2022.

China’s General Administration of Customs, Beijing, reported last week that its outbound shipments declined 8.5% in August 2023 from a year earlier. This was less than the 14.5% year-over-year drop in exports noted in July, which was the worst such result since February 2020 (due to the COVID-19 pandemic). Imports to China, including intermediate components, commodities, and consumer products also fell 7.3% in August 2023 from a year earlier, which was slower than the July’s 12.4% drop. This run of downbeat data during the summer months has sparked concerns by economists over China’s long-term growth trajectory and resulted in lower forecasts by investment banks who now forecast China’s gross domestic product (GDP) to be below for 5% for 2023.

The Biden administration last week canceled all remaining oil and gas leases issued in the Arctic National Wildlife Refuge under the Trump administration. This announcement comes following the Biden administration’s approval of the Willow oil drilling project in Alaska’s National Petroleum Reserve earlier this year over objections by environmentalists and Democrat politicians. The proposed regulation would bar new oil and gas leasing on 10.6 million acres, or more than 40% of the National Petroleum Reserve. The new actions don’t affect the Willow project.

The Pentagon last week announced that it intends to field a vast network of artificial intelligence (AI)-powered technologies, drones, and autonomous systems over the next two years to counter threats from China and other adversaries. The Pentagon stated that they plan to spend hundreds of millions of dollars to produce an array of thousands of air-, land-, and sea-based AI systems that are intended to be “small, smart, and cheap.” One approach could be to build on the capabilities demonstrated by Task Force 59, the U.S. Navy’s network of drones and sensors designed to monitor Iran’s military activities in the Middle East. The autonomous systems are things the military might use for three to five years before moving on to the next big thing, following the rapid pace of innovations in this arena.

Major U.S. investors, including BlackRock, Goldman Sachs Asset Management, both of New York City, and others were reported last week to be investing in battery recycling ventures to capitalize on the 2022 climate law (the Inflation Reduction Act). These ventures create processes for reusing battery parts for electric vehicles from scrap metal or old batteries. The tax incentive for electric vehicles (EVs) using domestically sourced parts has initiated a very viable new industry as customers for scrap parts continue to grow and new battery plants emerge throughout the U.S.

The United Kingdom (U.K.) is now set to rejoin the European Union’s (EU’s) preeminent science R&D funding program after being delayed two years by the Brexit process. The European Commission (EC) and the U.K. issued a joint statement last week announcing their plans to create Horizon Europe, a successor to the previous Horizon 2020 program that the U.K. was a member of. Horizon Europe is a seven-year initiative designed to fund innovation and foster collaboration across the EU, U.K., Ukraine, Armenia, Israel, New Zealand, and others. The U.K. will rejoin the Horizon program starting January 1, 2024, at a cost of $2.8 billion/year which will run through 2027.

South Korea’s science ministry, Seoul, announced last week that it plans to invest $3.8 billion into R&D in 2024 to promote 12 strategic technologies as part of the country’s long-term growth plan to take the global lead in up-to-date technologies. The 2024 investment increased 6.4% from the 2023 investment to build more capacity and put more effort into the influential and emerging sectors. The technologies include semiconductors and displays, secondary batteries, advanced mobility, next generation nuclear power, advanced biology, aerospace and ocean engineering, hydrogen, cybersecurity, AI, next generation communications, advanced robotics, and quantum technologies. The science ministry has already provided a development roadmap for some of these technologies.

Gotion High Tech, Shanghai, announced last week that it plans to build a $2 billion EV battery plant in Manteno, Illinois. The state provided $536 million in incentives to Gotion which were made possible by various legislation passed through the Democratic-led Illinois General Assembly. Workers at the plant will be paid at least 120% of the average wage of similar jobs. Gotion will also receive a 30-year property tax abatement. As part of the announcement, a state-of-the-art manufacturing training academy will be developed to educate workers pursuing careers in the clean energy sector.

 

R&D World’s R&D Index is a weekly stock market summary of the top international companies involved in R&D. The top 25 industrial R&D spenders in 2020 were selected based on the latest listings from Schonfeld & Associates’ June 2020 R&D Ratios & Budgets. These 25 companies include pharmaceutical (10 companies), automotive (6 companies), and ICT (9 companies) that invested a cumulative total of nearly 260 billion dollars in R&D in 2019, or approximately 10% of all the R&D spent in the world by government, industries and academia combined, according to R&D World’s 2021 Global R&D Funding Forecast. The stock prices used in the R&D World Index are tabulated from NASDAQ, NYSE, and OTC common stock prices for the companies selected at the close of stock trading business on the Friday preceding the online publication of the R&D World Index.