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Total R&D spending among the world’s 1000 largest companies fell 3.5% to US$503 billion in 2009 compared to 2008. This is the first fall in innovation spend since consulting firm Booz & Company started compiling figures 13 years ago.

This followed a relatively strong 2008 during which R&D spending grew despite the global economic recession.

Apple, Google and 3M, known for their innovative practices weren’t in the top 10.

The leader of the pack was pharmaceutical giant Roche Holdings, which boosted its R&D spend to $9.1 billion, representing over 20% of its sales. Microsoft came in second, with a $9.01bn spend, equivalent to 15.4% of its sales, and Nokia was third, with an $8.24bn spend equaling 14.4% of its sales.

The top 10 companies as a group spend $75bn in 2009, down 5% on 2008.

In putting together its list, Booz & Co. says every one of the top 1000 companies follows one of three innovation strategies.
• Need seeker
• Market reader
• Technology driver

The study shows why highly innovative companies are able to consistently perform. Their secret? They’re good at the right things, not at everything.