Spectacular declines by TELUS Corp and the now-defunct Nortel Networks Corp led to the worst drop in corporate R&D spending in recent memory as Canada's Top 100 R&D-performing firms posted $9.64 billion in outlays, a 9.4% decline over 2009 when $10.4 billion was spent. Half of the companies on the list posted lower R&D outlays, the highest number of decliners in years.

The discouraging corporate R&D performance comes despite an increase in overall revenues of nearly 5%. The current downturn could push R&D outlays down even further in 2011.

TELUS and Nortel posted drops of 81% and 87.3% respectively but when taken out of the mix, the remaining 98 firms posted a collective 3.5% gain powered by major increases from Ericsson Canada Inc (79.2%) and #1-ranked Research In Motion Ltd (26.3%).

RIM's $1.4 billion R&D tally marks the second year in a row that the Waterloo ON-based manufacturer of the Blackberry line of smart phones has topped the list. With $20.5 billion in annual revenue, the company posted a healthy 6.8% in research intensity (R&D as a percentage of revenue).

In 2009, TELUS posted the greatest gain of all Top 100 companies (211%), vaulting from 11th to 4th place. The 2010 performance of the Vancouver-based telecommunications services firm saw R&D outlays plunge from $653 million to $124 million for a #16 ranking, tied with competitor Rogers Communications Inc. The major player in the telecommunications services sector — BCE Inc — boosting its R&D by 1.9% and moved from 3rd to 2nd place with R&D expenditures of $821 million.

The Top 100 Corporate R&D Spenders ranking is produced by Research Infosource, a sister firm to RE$EARCH MONEY.

Despite the less-than-stellar results of this year's ranking, the Top 100 list contains a healthy mix of sectors in which R&D is a driving force. The Top 10 alone has representation from seven sectors including automotive (Magna International Inc), aerospace (Pratt & Whitney Canada Corp, Bombardier Inc) and electronic systems and parts (AMD Canada).

Communications and telecom equipment companies are the single largest R&D-spending sector, with 12 firms racking up $2.42 billion in R&D for 26% of the Top 100 total. While no firms in the pharmaceutical and biotechnology (P&B) sector made the top 10, there are 26 firms placed in the Top 100, spending $1.47 billion or 16% of the total. Of the 10 most research-intensive firms, seven come from the P&B sector.

Of the top 10 firms by growth, only one is from the P&B sector, while half of the firms posting the largest declines in R&D spending are P&B.

The only research-intensive firm from the upper tier of corporate R&D spending is Atomic Energy of Canada Ltd. The crown corporation recently privatized its nuclear reactor products division and boosted its R&D expenditures in 2010 by 21.2% to $476 million.

In 2010, 22 companies spent in excess of $100 million on R&D, 14 of which are Canadian owned. Cumulatively, these firms spent $6.67 billion on R&D, down 13.1% from the year before. When Nortel and TELUS are omitted, however, the remaining 20 firms posted a 4.5% increase in R&D spending.

Ontario was home to Ontario 45 of Top 100 firms, followed by Quebec (27), British Columbia (13) and the Prairies (14).

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