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Corporate R&D Spending Is at a Record High—With Chinese Firms Posting the Fastest Growth

November 1, 2018, 11:14 AM UTC

A new study out from PwC this week shows R&D spending by companies reached record levels in 2018—a good sign for the future.

The study looks at the 1,000 public companies around the world that spend the most on R&D, and found a hefty 11.4% jump from 2017, to a record-high $782 billion. The increase was nearly triple the rise from 2016 to 2017.

The top ten R&D spenders were:

1. Amazon
2. Alphabet
3. Volkswagen
4. Samsung
5. Intel
6. Microsoft
7. Apple
8. Roche
9. Johnson & Johnson
10. Merck

Companies headquartered in North America were the biggest spenders by far—accounting for nearly half of the total—but Chinese companies saw the fastest growth, up 34% from the previous year, compared to an 8% increase at North American companies. The authors said that when they started this list in 2005, only eight Chinese companies registered, with a negligible amount of spending. But this year, 145 Chinese companies were among the top 1,000 spenders.

Rising R&D spending is an indication that companies are committing to the future, and should portend future growth in productivity. But the study’s authors caution that they find no direct correlation between a company’s R&D spending and its overall ability to innovate.

“For the entire 14 years we have conducted this annual study we have consistently found there is no statistically significant relationship between how much you spend on R&D and how well you perform,” Barry Jaruzelski, partner at PwC’s strategy consulting business development told me. “What does matter is the depth of your customer insight, the quality of the talent assembled, and rigor of the processes you employ.”

Worth noting that wages also have been showing strong growth this year, after a decade-long slump. The full-employment economy seems to be driving companies to invest in both people and innovation. The longer that continues, the better. Let’s hope the recent stock market slump isn’t a sign that the end is near.

This story first appeared in Fortune’s CEO Daily newsletter. Subscribe here.