R&D and value added among leading UK investors

This section looks at the value added contribution to the economy from leading R&D investors in the UK. Value added is the difference between a company’s sales and the cost of its boughtin goods and services. It measures the amount of wealth created by a company and provides a broad perspective on a company’s contribution to the economy.

Table 5 lists the top 50 UK R&D investors by their value added contributions. Companies that spend most on R&D generally are among those that add the most value to the broader economies in which they operate. This is particularly the case with major pharmaceutical firms. Of the top 50 value added contributors, three fifths of the amount came from ten companies - contributing some £237 billion. Of the top ten, only the two banks failed to increase their value added contribution compared with the previous year, with mining companies making the largest increase in their contributions. The list is led by two oil and gas producing companies, Royal Dutch Shell and BP, which jointly added some £93 billion to the wider economy in 2008. Banks and mining firms also featured in the top ten most value added. GlaxoSmithKline and AstraZeneca, the UK’s two leaders in R&D investment, ranked seventh and eighth respectively by value added contributions, adding £28.3 billion to the economy in 2008.

Companies can calculate their own value added using the calculator at: http://www.innovation.gov.uk/value_added/default. asp?quicklink=calculator.

Table 5: Top 50 UK R&D companies by value added