Table 5 shows the composition of firms in both the UK850 and G1400 broken down by the value of their sales
Companies with sales of less than £50 million were the largest proportion of the UK850 in 2007 (40%) followed by companies with sales between £50 million and £500 million (35%). 214 companies had sales over £500 million, of which 48 achieved sales of over £5 billion.
In contrast, and as expected, Table 5 also shows that firms in the G1400 have larger sales than those in the UK850. Nearly three quarters of the G1400 firms had sales in excess of £500 million. Proportionately more of the 88 UK firms in the G1400 had sales over £5 billion: 31% of UK firms had sales in excess of £5 billion compared to 24% of the other 1,312 G1400 firms. On the other hand, 11% of UK firms had sales below £50 million as compared with just 4% of G1400 firms.
Table 5: Distribution of firms by firms’ value of sales in UK850 and G1400 (2007)
Table 6 analyses investment in R&D as a proportion of sales for firms of different sizes in both the UK850 and the G1400. It shows that:
- smaller firms in the UK (as measured by their sales) invested significantly more in R&D than their larger peers in the UK: for example firms with sales less than £50 million invested 29% of their sales in R&D whereas those with sales in excess of £5 billion invested 1%; and
- UK firms invested significantly less in R&D (as a proportion of sales) than their counterparts globally: for example, the largest companies globally outside the UK (with sales of more than £5 billion) invested 3% of their sales in R&D compared with 1% for those with similar sales from the UK.
Both these results partly reflect the mix of firms in the UK850 and G1400. First, smaller firms in the UK850 tend to be more R&D-intensive, being concentrated in high-tech sectors, while larger firms include banks and oil & gas companies, for example, with high absolute R&D numbers that represent a very small proportion of their total sales. Second, as previously noted, the UK’s sectoral mix of R&D businesses is quite different to that of other countries’. Previous Scoreboards have shown how this accounts for the UK firms’ lower R&D intensity.
Table 6: R&D and sales by firms’ value of sales (2007)
