US R & D spending is far ahead of China: Ali Tencent is only Amazon zero.

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 US R & D spending is far ahead of China: Ali Tencent is only Amazon zero.


Amazon needs to invest a lot of money in developing warehouse robots and delivery UAVs.

According to a recent report by PricewaterhouseCoopers, American companies led by Amazon and Alphabet, the parent company of Google, have invested more than five times as much in R&D as Chinese companies. PricewaterhouseCoopersreport tracked R&D expenditures of the worlds largest 1,000 listed companies in the year ending June 30.

Baidu, Tencent Holdings and Alibaba, Chinas three largest technology giants, spend less on R&D than at least 44 other companies, including Panasonic, a Japanese industrial and consumer electronics conglomerate.

Edward Tse, chief executive of Gaofeng Consulting, which serves Chinese and foreign companies, said the difference reflects the way Chinese companies have innovated in the past decade: they are good at applying existing technology, not original research. He talked about two examples of mobile payment and communication applications.

However, PWCs data do not include non-listed company, so HUAWEI is excluded. According to HUAWEI, it spent more than 13 billion dollars on R & D last year.

According to PricewaterhouseCoopers statistics, the total R&D expenditure of all companies reached a record $781.8 billion in the year ending June 30, of which $329 billion came from local companies in the United States. According to PricewaterhouseCoopers, Chinese companies invested $61 billion in R&D, compared with $7 billion in 2010. Today, 145 Chinese companies rank among the 1,000 with the highest R&D expenditure, compared with 14 10 years ago.

Xie Zuchi pointed out that the increase in R & D expenditure reflects the pressure faced by Chinese enterprises in independent innovation, especially in the fields of artificial intelligence, 5G and autopilot.

Barry Jaruzelski, the lead author of the report and head of PwCs U.S. industrial products business, said, The gap between the United States and China is narrowing, and it continues to narrow. If the gap between the two sides is filled in the next 10 years, it will not be shocking.

Of the largest R & D spending enterprises in China, Alibaba invested $3 billion 600 million and Tencent invested $2 billion 700 million. By contrast, Amazon, which spends the most on R&D in all listed companies, invested $22.6 billion, up 40% from a year earlier. Googles parent company Alphabet spent $16 billion 200 million.

The two Silicon Valley giants have higher revenues than Chinese companies, so the gap in R&D expenditure between them will narrow if such investments are measured as a percentage of sales.

Amazon has a wide range of businesses and needs a lot of R&D investment, such as building warehouse-operated robots and delivery UAVs. In September, the company unveiled 15 new or upgraded devices driven by Alexa, its AI assistant. The company also uses virtual reality technology to allow consumers to get a close look at goods on its traditional shopping website.

At the same time, Alphabet has been spending money to train his engineering talents, especially in the field of artificial intelligence. Ruth Porat, the companys chief financial officer, said on a earnings call last week that R&D was the biggest factor in the growth of operating expenses.

Last year, Tencent opened its first AI laboratory in Seattle, led by a former Microsoft researcher specializing in speech recognition. The new facility is a complement to Tencents existing AI laboratory at its headquarters in Shenzhen. The laboratory consists of over 200 engineers and 50 AI scientists.

The Alibaba recently said it will set up a special department to develop its first AI chip, which will be used for self driving cars or smart cities.

Amazon and Alphabet declined to comment, while Baidu and Alibaba declined to comment. Tencent said it could not comment before its earnings announcement in November 14th.

In a report this year, the US National Science Commission, headquartered in Alexandria, Virginia, released a broader indicator of global R&D spending. According to the report, Chinas investment is about 4/5 of that of the United States.

PWC researchers say they have yet to find a link between R & D investment and innovation. The results show that the technology industry is the main source of R&D expenditure, and nearly 40% of global R&D expenditure comes from the technology industry.

Experts in the technology industry say that Chinas technology giants spend less on R&D, partly because they are younger than their Silicon Valley rivals and have smaller global operations and budgets. Sabrina T. Howell, an associate professor of finance at New York Universitys Stern School of Business who studies innovation in China and the United States, says that Alibaba, Tencent and other large Chinese companies are more likely to seek innovation through mergers and acquisitions than through internal research. Part of what you see in research and development data is Chinas innovation outsourcing, she said. Another factor is the difference in purchasing power of R&D funds between the two countries, especially in hiring scientists and engineers. How many scientists do you get when you spend one million dollars? Jaruzelski said, in China, you get more doctorate than in the United States. (ROBOM) source: NetEase science and technology report editor: Wang Fengzhi _NT2541

Experts in the technology industry say that Chinas technology giants spend less on R&D, partly because they are younger than their Silicon Valley rivals and have smaller global operations and budgets.

Sabrina T. Howell, an associate professor of finance at New York Universitys Stern School of Business who studies innovation in China and the United States, says that Alibaba, Tencent and other large Chinese companies are more likely to seek innovation through mergers and acquisitions than through internal research.

Part of what you see in research and development data is Chinas innovation outsourcing, she said.

Another factor is the difference in purchasing power of R&D funds between the two countries, especially in hiring scientists and engineers.

How many scientists do you get when you spend one million dollars? Jaruzelski said, in China, you get more doctorate than in the United States. (ROBOM)