The R&D World Index (RDWI) for the week ending September 24, 2021, closed at 5,443.09 for the 25 companies in the R&D World Index. The Index was up 0.34% (or 18.55 basis points) from the week ending September 17, 2021. The stock of 12 R&D World Index members gained value from 0.11% (Pfizer) to 8.62% (Astra Zeneca PLC). The stock of 13 R&D World Index members lost value from -0.07% (Intel) to -9.35% (Alibaba).
Click to enlarge.
European cloud-services provider OVHcloud (OVH Groupe) announced last week that it plans to launch an initial public offering (IPO) which could value the company at nearly $5 billion. The Roubaix, France, company rents computing, storage and networking capabilities to users throughout North America, Europe, Singapore and Australia. The company also operates its own global fiber-optic network. OVH would face fierce competition against the gigantic cloud services provided by Amazon, Microsoft and Google/Alphabet.
RDW Index member General Motors announced last week that it would begin replacing the batteries in October in all the 142,000 Chevrolet Bolt electric vehicle cars that it has recalled due to a fire risk in the battery system. GM and the battery supplier LG Energy Solutions say they have identified and fixed a manufacturing defect that caused the battery fires. The 142,000 EVs are all the Bolt vehicles that GM manufactured from 2016 to 2020. The recall is expected to cost GM about $1.8 billion. GM has sent specific charging instructions to Bolt owners and warnings to not park them inside of buildings/garages or near other cars, as the Bolts could (and have) caused ancillary fires to other cars and buildings when they failed, which could occur even when not in use. EV battery fires are extremely difficult to extinguish and can take more than four hours for fire departments for just one vehicle. GM plans to determine which Bolts get repaired first based on battery life and owner charging behaviors. GM first started recalling some Bolts in November 2020. The recall could last into late 2022 or early 2023.
NASA last week announced it is splitting up its space explorations and operations division into separate units. The reorganization is expected to help the agency focus its efforts as more private companies appear to focus their business opportunities in space. One of the new divisions will handle NASA’s efforts to return Americans to the moon (project Artemis) and on longer-term work, such as traveling to Mars. The other division will manage launch activities and operations in space, including the International Space Station (ISS). NASA stated last week that it wants to support commercial space growth and that it could save about $1 billion annually by purchasing services from private space facilities. The agency is now starting to transition out of the ISS which is expected to be structurally sound until 2028.
Employment and salaries in biotechnology are growing at a faster pace than in other technology sectors, according to a report issued last week by Emsi Burning Glass, a Boston-based job market analytics firm. Average earnings for biotech research scientists were up to nearly $224,000 in 2020, up 20.8% since 2015. Biotech firms are fighting for talent as they staff up to meet the growth projections dictated by a ready access to venture capital and the public markets. From 2015 to 2021, job growth for biotech researchers increased by 50% to 241,000, outpacing that in telecom, e-commerce and the computer industry.
The Federal Reserve last week modified its core inflation rate for 2022 to 2.3%. The Fed has been slowly raising this projection from September 2020 when they forecast the 2022 rate to be 1.8%. Six of the 18 Federal Open Market Committee participants actually think that core inflation will be 2.5% or higher in 2022. The Fed does not think that interest rate increases are valid at this point and continues buying about $120 billion/month in bonds. The Fed wants this to drop to zero before it starts to raise interest rates, which could happen by mid-2022.
Tesla’s CEO Elon Musk announced last week at the World Internet Conference in Wuzhen, China, that his company will continue to increase investment and R&D in China in the future. He also stated that Tesla is developing full self-driving vehicles with practical, vision-based artificial intelligence (AI), including chip development on the inference level and on the training level. Tesla has already established a data center in China, which includes production, sales, service teams and charging stations.
According to a report issued last week by the Information and Innovation Foundation (ITIF), the 2017 Tax Cuts and Jobs Act (TCJA) will no longer allow companies to expense current R&D costs in the current year, starting in 2022. At that time, companies will be required to amortize their R&D costs over five years. The current U.S. tax credit is 39% of the optimal level to maximize benefits relative to costs. If the TCJA amortization provision is not repealed, the new effective rate will be just 18% of the optimal rate, according to the ITIF.
A report issued last week by the Department of Energy’s (DOE’s) Argonne National Laboratory, the DOE’s Vehicle Technologies Office, NASA’s Glenn Research Center and others outlines a set of battery requirements and R&D needs to accelerate the commercialization of electric propulsion in aircraft, from air taxis to 737-class aircraft in the long term. The report explores air taxis, 20-passenger commuter aircraft, 50-passenger regional aircraft and 150-passenger single aisle 737-class aircraft. Research for each of these areas is identified where DOE and NASA could help spur innovation in electric aviation batteries, including new types of energy storage.
Following the electric grid failures during a freeze in Texas in February 2021, the Federal Energy Regulatory Commission and the non-profit North American Electric Reliability Corp. issued a report last week which outlines the reasons for the cascading failures and recommends more stringent standards for electric power plant operators and natural gas supply networks. The report recommends that operators be able to recover costs for winterizing and that Congress or states require natural gas facilities to plan and prepare for deep freezes.
Karl Deisseroth, professor of psychiatry, neuroscience and bioengineering at Stanford University, was named a co-winner of the New York City-based Lasker Award for Research last week for his research work on optogenetics. Deisseroth was the 2014 Scientist of the Year selected by R&D Magazine (the predecessor of R&D World).
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 2019 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) who 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.
