China and India R&D spend continues to outstrip

Implications in the cleantech war that is developing globally can be seen in the latest research into R&D investment and innovation.

Research from consultants Booz & Company into the world's top 1,000 spenders on R&D, show that while there had been recovery in spending by North American companies, it was surpassed for a second consecutive year by spending in India and China. The Booz & Company 2010 Global Innovation 1000 study has findings reflected by an enthusiastic evaluation of innovation in China by the UK's Institute of Fiscal Studies.

The Institutes's Innovation in China: the rise of Chinese inventors in the production of knowledge introduced itself by saying: "In 2010 China was the world's fourth largest filer of patent applications. This followed a decade of unprecedented increases in investment in skills and Research and Development. If current trends continue China could rank first in the very near future. We provide evidence that the growth in Chinese patenting activity has been accompanied by a growth in Chinese inventors creating technologies that are near to the science base."

The Booz study found that while spending surged upwards last year from lows in 2009, it still was reduced as a percentage of profit. For India and China, however, it was a different story. While they only accounted for 2 percent of global R&D in 2010, they increased spending on R&D investment by more than 38 percent, similar to the previous year's expenditure. Companies from other regions around the world boosted R&D by only about 14 percent.

The 1,000 companies that spent the most on research and development in 2010 increased their investment by 9.3 percent to USD550 billion, a turn around from 2009's 3.5 percent drop.

While neither report breaks figures out for clean, green or sustainable industries, much of the spending in today's USD8.8 billion auto sector R&D will be directed towards clean and greener technologies. Similarly in the chemical and energy sectors worth some USD2.3 billion in R&D.

Japanese companies dominate the Asian presence in the top 20 R&D spenders including Toyota Motor, which had been the top R&D spender for years prior to the recession. It came in sixth place with an R&D spending increase of under 1 percent. Korea's Samsung, on the other hand, moved from tenth to seventh place but with an increase in R&D spend of 23.2 percent. Panasonic ranked 12 and Honda at 17.

But the Booz research concluded that R&D spend did not often reflect innovation. While the IFS research said its methodology included both patent awards and citations from scientific literature, taking China last year to fourth place globally in terms of the number of Patent Co-operation Treaty (PCT) patents it filed, the US, Japan and Germany ahead of it. The country's rate of advance has been dramatic: in 2000 China filed 1.8 percent of PCT patents, by 2010 it filed 7.5 percent, it revealed.