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by Barry Jaruzelski, Volcker Staack, and Brad Goehle 
2014 Global Innovation 1000 
Proven paths to innovation 
success
R&D spending at highest level ever 
R&D spending reached a record US$647 billion in 2014 
Global Innovation 1000 R&D spending US$ billions 
9-year CAGR = 5.5% 
$400 $409 $447 
$501 $538 $508 
$560 
$614 $638 $647 
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 
Year-on-Year 
Growth Rate 
2.2% 9.3% 12.2% 7.3% -5.6% 10.3% 9.7% 3.8% 1.4% 
Note: Historical data referenced in the 2014 and future studies will not always align with previously published figures for the 2005 through 2012 studies 
because of a methodology change implemented in 2013 that was applied to prior year data in 2014. 
Sources: Bloomberg data; Capital IQ data; Strategy& Company analysis 
Strategy& read more on strategyand.pwc.com
Chinese innovation spending is up 
Over the past 10 years, Chinese 
companies’ share of total R&D 
spending has grown by a factor 
of 15 
…In the past year alone, innovation 
spending in China increased 46% 
Strategy& read more on strategyand.pwc.com
Not all industries are spending more 
Only half of the industries increased their R&D spending 
in 2014 
Percentage change in R&D spending by industry 2013-14 
12 
10 
8 
6 
4 
2 
0 
-2 
-4 
-6 
-8 
16.5% 
Software 
and 
Internet 
2.1% 
Auto 
-0.5% 
Aerospace 
and 
defense 
-1.2% 
Health 
4.2% 
4.1% 
Industrials 
Chemicals 
and 
energy 
3.2% 
-7.5% 
Telecom Other 
-1.8% 
Consumer 
-1.8% 
Computing 
and 
electronics 
Software & Internet companies increased spend more than 
anyone else: 16.5% 
Sources: Bloomberg data; Capital IQ data; Strategy& analysis 
Strategy& read more on strategyand.pwc.com
Most Innovative vs. Top Spenders 
For the 5th year in a row, we found little overlap between 
the 10 Most Innovative companies and Top 10 R&D Spenders 
The 10 Most Innovative Companies 2014 
Company Industry 2014 R&D 
spending1) 
Apple Computing and 
electronics 
4.5 
Google Software and Internet 8.0 
Amazon Software and Internet 6.6 
Samsung Computing and 
electronics 
13.4 
Tesla Auto 0.2 
3M Industrials 1.7 
General 
Industrials 4.8 
Electric 
Microsoft Software and Internet 10.4 
IBM Computing and 
electronics 
6.2 
Procter & 
Gamble 
Consumer 2.0 
The Top 10 R&D Spenders 2014 
Company Industry 2014 R&D 
spending1) 
Volkswagen Auto 13.5 
Samsung Computing and 
electronics 
13.4 
Intel Computing and 
electronics 
10.6 
Microsoft Software and Internet 10.4 
Roche Health 10.0 
Novartis Health 9.9 
Toyota Auto 9.1 
Johnson & 
Health 8.2 
Johnson 
Google Software and Internet 8.0 
Merck & Co. Health 7.5 
NEW 
Increase or decrease within top 10 ranking 1) In US$ billion. Sources: Bloomberg data; Capital IQ data; Strategy& analysis compared to 2013 
Strategy& read more on strategyand.pwc.com
The Most Innovative outperform 
Once again we found that the 10 Most Innovative companies 
outperformed the Top 10 R&D Spenders 
Performance of the 10 Most Innovative Companies vs. Top 10 R&D Spenders, 2014 
51% 
33% 
Market cap growth 
(5-yr. CAGR) 
100% 
50% 
71% 
65% 
EBITDA as a 
% of revenue 
(5-yr. avg.) 
0% 
47% 46% 
Revenue growth 
(5-yr. CAGR) 
Highest 
possible score: 
Normalized 
performance of 
industry peers: 
Lowest 
possible score: 
10 Most Innovative Companies Top 10 R&D Spenders 
Showing that when it comes to innovation, it's not what you 
spend, but how you spend it that matters 
Sources: Bloomberg data; Capital IQ data; Strategy& Company analysis 
Strategy& read more on strategyand.pwc.com
Learn more 
See more of the findings from this year’s 
Global Innovation 1000 study, including videos, 
interactive graphics, and an in-depth look at how companies 
plan to shift their innovation strategies in the next 10 years: 
www.strategyand.pwc.com/innovation1000 
Copyright and Definition 
© 2014 PwC. All rights reserved. 
PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. 
Please see www.pwc.com/structure for further details. 
Disclaimer: 
This content is general information purposes only, and should not be used as a substitute for consultation with professional 
advisors. 
Strategy& read more on strategyand.pwc.com

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2014 Global Innovation 1000: Proven paths to innovation success

  • 1. by Barry Jaruzelski, Volcker Staack, and Brad Goehle 2014 Global Innovation 1000 Proven paths to innovation success
  • 2. R&D spending at highest level ever R&D spending reached a record US$647 billion in 2014 Global Innovation 1000 R&D spending US$ billions 9-year CAGR = 5.5% $400 $409 $447 $501 $538 $508 $560 $614 $638 $647 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Year-on-Year Growth Rate 2.2% 9.3% 12.2% 7.3% -5.6% 10.3% 9.7% 3.8% 1.4% Note: Historical data referenced in the 2014 and future studies will not always align with previously published figures for the 2005 through 2012 studies because of a methodology change implemented in 2013 that was applied to prior year data in 2014. Sources: Bloomberg data; Capital IQ data; Strategy& Company analysis Strategy& read more on strategyand.pwc.com
  • 3. Chinese innovation spending is up Over the past 10 years, Chinese companies’ share of total R&D spending has grown by a factor of 15 …In the past year alone, innovation spending in China increased 46% Strategy& read more on strategyand.pwc.com
  • 4. Not all industries are spending more Only half of the industries increased their R&D spending in 2014 Percentage change in R&D spending by industry 2013-14 12 10 8 6 4 2 0 -2 -4 -6 -8 16.5% Software and Internet 2.1% Auto -0.5% Aerospace and defense -1.2% Health 4.2% 4.1% Industrials Chemicals and energy 3.2% -7.5% Telecom Other -1.8% Consumer -1.8% Computing and electronics Software & Internet companies increased spend more than anyone else: 16.5% Sources: Bloomberg data; Capital IQ data; Strategy& analysis Strategy& read more on strategyand.pwc.com
  • 5. Most Innovative vs. Top Spenders For the 5th year in a row, we found little overlap between the 10 Most Innovative companies and Top 10 R&D Spenders The 10 Most Innovative Companies 2014 Company Industry 2014 R&D spending1) Apple Computing and electronics 4.5 Google Software and Internet 8.0 Amazon Software and Internet 6.6 Samsung Computing and electronics 13.4 Tesla Auto 0.2 3M Industrials 1.7 General Industrials 4.8 Electric Microsoft Software and Internet 10.4 IBM Computing and electronics 6.2 Procter & Gamble Consumer 2.0 The Top 10 R&D Spenders 2014 Company Industry 2014 R&D spending1) Volkswagen Auto 13.5 Samsung Computing and electronics 13.4 Intel Computing and electronics 10.6 Microsoft Software and Internet 10.4 Roche Health 10.0 Novartis Health 9.9 Toyota Auto 9.1 Johnson & Health 8.2 Johnson Google Software and Internet 8.0 Merck & Co. Health 7.5 NEW Increase or decrease within top 10 ranking 1) In US$ billion. Sources: Bloomberg data; Capital IQ data; Strategy& analysis compared to 2013 Strategy& read more on strategyand.pwc.com
  • 6. The Most Innovative outperform Once again we found that the 10 Most Innovative companies outperformed the Top 10 R&D Spenders Performance of the 10 Most Innovative Companies vs. Top 10 R&D Spenders, 2014 51% 33% Market cap growth (5-yr. CAGR) 100% 50% 71% 65% EBITDA as a % of revenue (5-yr. avg.) 0% 47% 46% Revenue growth (5-yr. CAGR) Highest possible score: Normalized performance of industry peers: Lowest possible score: 10 Most Innovative Companies Top 10 R&D Spenders Showing that when it comes to innovation, it's not what you spend, but how you spend it that matters Sources: Bloomberg data; Capital IQ data; Strategy& Company analysis Strategy& read more on strategyand.pwc.com
  • 7. Learn more See more of the findings from this year’s Global Innovation 1000 study, including videos, interactive graphics, and an in-depth look at how companies plan to shift their innovation strategies in the next 10 years: www.strategyand.pwc.com/innovation1000 Copyright and Definition © 2014 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. Disclaimer: This content is general information purposes only, and should not be used as a substitute for consultation with professional advisors. Strategy& read more on strategyand.pwc.com