By 2020, companies will have shifted the majority of their R&D spending away from product-based offerings to software and service offerings, according to the 2016 Global Innovation 1000 Study from Strategy&, PwC’s strategy consulting business.
The need to stay competitive is the top reason why companies cited a shift in their R&D budgets towards software and services, and for good reason – according to the study, companies who reported faster revenue growth relative to key competitors allocated 25 percent more of their R&D budgets to software offerings than companies who reported slower revenue growth.
- The average allocation of R&D spending for software and services increased from 54% to 59% between 2010 and 2015 and is expected to grow to 63% by 2020.
- Meanwhile, the average allocation of R&D spending dedicated to product-based offerings fell to 41 percent (from 46% in 2010), and is expected to fall to 37% by 2020 (an overall decrease of 19% this decade)
- Average allocation of R&D spending on software offerings alone will increase by 43% by the end of this decade and R&D spending on services will gradually overtake investment in product-based innovation (39% vs. 37% by 2020).
- Global R&D spending on software offerings has increased by 65% between 2010-2015, from US $86 billion to $142 billion.
“In this year’s Global Innovation 1000 study we focused on the transformation that R & D is undergoing as companies strengthen their software and service offerings. The shift is increasingly being driven by the significant improvement in what software can do and the growing use of embedded software and sensors in products, customers, and suppliers via the Internet of Things and the availability of cloud-based data storage. Most of all, it is being driven by increasing customer expectations,” says Liesbeth Botha, Strategic Digital Transformation Leader, PwC Africa.
Only one South African company –chemical and energy giant, Sasol (No. 714) – was listed on the 1000 Companies List for R&D spend and R&D intensity.
According to PwC’s Africa Business Agenda, 2015 report almost 90% of CEOs saw digital technologies and innovations as vital to their success and that will transform their businesses over the next five years. In addition, new advancements and breakthroughs in frontiers of R&D are opening up more opportunities for businesses across the African continent. Adds Botha: “African corporates together with the Government have the opportunity to drive more domestic R&D investment into innovation and digital transformation to build an economy that is recognised for its talent, skills and knowledge.”
For the seventh year running, Apple and Alphabet (formerly Google) continue to lead the most innovative list. Google continues to make waves with initiatives such as its self-driving project, while Apple focuses on its capabilities in gaining customer insights to improve popular products such as the iPhone.
PwC’s strategic partnership with Google is illustrative of its own investment in, and commitment to innovation, comments Botha.
Companies will recruit less mechanical engineers and more data and software engineers to build their capabilities
To support the development of software and services offerings, fewer companies will focus their R&D spending on the electrical and mechanical field. By 2020, the number of companies reporting that electrical engineers are their top employed engineering specialty will fall by 35 percent and the proportion of companies who expect that data engineers will represent their largest group of employed engineers will double from 8% to 16%.
Regionally, companies in North America are making the strongest shift to software offerings—from 15 percent of total R&D spending in 2010 to 24 percent in 2020. While Asia remains the most product-centric region, with 44 percent of R&D allocated to product offerings in 2010, only falling to 40 percent in 2020. The automotive and industrial sectors are making the most aggressive push towards developing new software offerings.
Among companies that made an acquisition during the past five years, the vast majority – 71 percent – were made to enhance capabilities in software (33%) or services (38%)
Strategy&’s annual analysis of the world’s 1000 largest R&D spenders also found the following:
By 2018, the healthcare sector will surpass computing and electronics to become the largest R&D spending industry globally (US$165 billion v. US$159 billion), and the software and internet industry will leap ahead of the automotive sector.
· (US$129 billion v. US$105 billion); Industrials rounds out the Top 5 R&D industries by spend.
· For the first time in the study’s history, the number of Global Innovation 1000 companies headquartered in the US grew, up 9.5% year over year.
· Volkswagen, Samsung, Amazon, Alphabet (Google) and Intel round out the Top 5 R&D Spenders, with Amazon and Google making bold moves up the list (+4 and +2 positions, respectively).
· Global innovation professionals responding to a 2016 survey have ranked Apple, Alphabet (Google), and 3M as the three Most Innovative Companies in the world.
· The 10 Most Innovative Companies continue to outperform the Top 10 R&D Spenders on key performance metrics, as has been the case for each of the past seven years.
2016 Ranking: The 10 Most Innovative Companies vs. Top 10 R&D spenders
Data journalism takes top prize in revamped awards
The entries to the 2018 Vodacom Journalist of the Year Awards were extraordinarily varied and of an excellent standard, with new categories introduced which are based on content as opposed to platforms. This year, the judges decided that two entries were equally worthy of the coveted Vodacom Journalist of the Year Award.
The first co-winning entry, in the new Data Journalism category, is a set of stories by Alastair Otter and Laura Grant of Media Hack which showed how Data Journalism is shaping the future. The second co-winning entrant is Bongani Fuzile of the Daily Dispatch for his articles in the investigative category on how migrant workers were being ripped off by pension deductions (full citations below).
Convenor of the judging panel Ryland Fisher says: “This year we modernised the 12 categories that journalists could enter their work in and the change was embraced by entrants. In a turbulent time for media, the 2018 entries once again proved that there are excellent South African journalists delivering praiseworthy work, and we commend them for finding new and innovative ways to cover the news.”
Takalani Netshitenzhe, Chief Officer for Corporate Affairs at the Vodacom Group, says: “Vodacom is proud of its 17-year association with these prestigious awards, which make an important contribution to our society through the recognition of journalistic excellence. I’d like to congratulate all of tonight’s winners and, as always, I’d like to pay tribute to our hardworking judges. Ryland Fisher, Mathatha Tsedu, Arthur Goldstuck, Collin Nxumalo, Elna Rossouw, Patricia McCracken, Megan Rusi, Mary Papayya, Albe Grobbelaar and Obed Zilwa: thank you for making these awards a continued success.”
Veteran journalist and media stalwart Ms Amina Frense is the winner of the 2018 Vodacom Journalist of the Year Lifetime Achiever Award. She has spent decades in mainstream media both locally and internationally. She is a former Managing Editor: News and Current Affairs at the SA Broadcasting Corporation. She has worked in many countries abroad as a producer and a foreign correspondent, has written two books and is also a founding member of SANEF where she still serves as a council member (full citation below).
The overall winners share the R100 000 main prize. National winners in the various categories are as follows, with each winner taking home R10 000:
The entries in this category were of an exceptionally high standard. One entrant stood out and became the unanimous winner. This journalist showed an exceptional skill for story-telling and for finding unexpected angles and unknown facts. For his stories about Musangwe’s fight for recognition, Age cheating in SA football, and Hansie Cronje revisited, the winner is Ronald Masinda, and the team of Gift Kganyago, Nceba Ntlanganiso and Charles Lombard from eSAT TV.
Cons exploit Telegram ICO
Kaspersky Lab researchers have uncovered dozens of highly convincing fake websites claiming to be investment sites for an initial coin offering (ICO) by the Telegram messaging service. Many of these websites appear to belong to the same group. In one case alone, tens of thousands of US dollars’ worth of cryptocurrency were stolen from victims believing they were investing in ‘Grams’, Telegram’s rumoured new currency. Telegram has not officially confirmed an ICO and has warned people about fraudulent investor sites.
In late 2017, stories started to circulate that the Telegram messaging service was launching an initial coin offering (ICO) to finance a blockchain platform based on its TON (Telegram Open Network) technology. Unverified technical documentation was posted online, but there appears to have been no confirmation from Telegram itself. The resulting confusion seems to have allowed fraudsters to capitalise on investor interest by creating fake sites and stealing vast sums of money.
Kaspersky Lab researchers have discovered dozens of such sites, possibly belonging to the same group, claiming to sell tokens for ‘Grams’ and inviting investors to pay with cryptocurrencies including Bitcoin, Ethereum, lice litecoin, dash and Bitcoin dash. A record of transactions on one site revealed that the scammers were able to steal at least $35,000 US dollars’ worth of Ethereum from investors.
The researchers found that some of the websites were so convincing that even after Telegram and others began to issue warnings, they were still able to recruit potential investors. Most use a secure connection, require registration and generate a unique online wallet for each new victim, making it harder to track the money.
Judging by the content of the fake websites, it appears they may have common ownership. For example, several have the exactly the same ‘Our Team’ section.
“ICOs are a fairly risky investment and many people don’t yet fully understand how they work, so it is not surprising that high quality fake websites, with seemingly reassuring features such as a secure connection and registration are successful at luring people in. People wishing to invest in an ICO would do well to check with the company behind it and make sure they know exactly who they are giving their money to, or they may never see it again,” said Nadezhda Demidova, Lead Web-Content Analyst, Kaspersky Lab.
Kaspersky Lab offers the following advice for users considering investing in an ICO:
- Check for warning signs: for example, some of the fake Telegram ICO websites had the same wrong image next to the name of Telegram’s Chief Product Officer.
- Do your homework: always check with the brand’s official site to verify the legitimacy of the investment site and, if necessary contact the company’s ICO teams before investing any money or currency.
- Use reliable security solutions such as Kaspersky Internet Security and Kaspersky Internet Security for Android, which will warn you if you try to visit fake internet pages.