Brazil got two additional positions in the world ranking in research and development carried out by US consultancy Booz & Co. The country had five companies in the last two editions of the ranking – Petrobras, Vale, CPFL Energia, Totvs and Embraer – and now has seven, with the addition of Gerdau and Companhia Paranaense de Energia (Copel).
“The insertion of these two companies is not surprising, as they are from capital-intensive sectors (energy and steel), which need R&D to apply that money efficiently,” Gustavo Roxo, partner of Booz & Company in Brazil, told Valor.
Of the companies that were on previous lists, all improved their rankings. The biggest gain was CPFL Energia’s. The electric utility leaped 71 positions, to the 634th place from 705th. The consultancy’s survey has been conducted since 2005 and takes into consideration the 1,000 largest publicly listed companies in the world.
With the Brazilian companies’ results, the country totaled $3.7 billion, a $1.6 billion increase from 2010. The country nearly doubled its participation in global R&D spending. Brazil’s share, which was 0.39% in 2010, rose to 0.63% in 2011.
Mr. Roxo says that Brazil’s performance is positive, but Brazilian companies need to improve their investments so that the country can close in on developing nations such as China and India. Together, these two nations had the largest increase in R&D investments in the world in 2011: 27.1%, at $16.3 billion. Of this total, China accounted for more than 90%. The country has over 40 companies on the list of the most innovative. India, even though it has less investment than Brazil, at $2 billion, has nine companies on the list.
The issue, according to Mr. Roxo, is not just increasing the volume of money invested in this activity, but also to be more attentive to the classification of these investments in earnings reports. “A lot of this information isn’t clear in earnings reports. Spending on R&D ends up going in as regular investments. And it’s also important to highlight that to value what the company does,” he said.
Globally, R&D investments of the 1,000 largest companies were up 9.6% to $603 billion. It’s the second year in a row that they have grown, after contractions due to the world’s economic crisis in 2008 and 2009. Mr. Roxo says investment picking up was stimulated by the US.