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Siemens to Increase R&D Spending to Retain Competitive Edge

March 23 (Bloomberg) -- Siemens AG, Europe’s largest engineering company, plans to increase spending on research and development this year to retain a competitive advantage.

The bigger budget comes irrespective of whether technologies end up being commercially successful, Chief Executive Officer Peter Loescher said at an event at the company’s Munich headquarters today. Siemens spent 3.9 billion euros ($5.1 billion), or 5.3 percent of revenue, on R&D in its last fiscal year through September, up from 5.2 percent a year earlier.

“We would be ill-advised if we decided not to retain our culture of doing research at the forefront of technology,” said Klaus Helmrich, the Siemens management board member responsible for corporate technology. “That’s not a spontaneous thing, but needs continuity. You can’t just reduce it to the question of economic success.”

Siemens has suffered setbacks as some technologies failed commercially. The company said last year it will stop selling equipment for its particle therapy technology for treating cancer after amassing more than $1 billion in related charges.

Siemens allocated 1.6 billion euros of R&D spending to its industrial operations last year, while spending 1.2 billion euros for projects in health care, and 1 billion euros in energy units. Helmrich’s corporate technology department spent additional money.

The company said in January it plans to increase operating expenditure this year by as much as 1.3 billion euros. Siemens spent 14.2 billion euros on such items last year, with selling expenses and R&D being the largest components.

Chief Financial Officer Joe Kaeser said last month that Siemens will increase investments at a slower pace this year than planned, without elaborating.

To contact the reporter on this story: Richard Weiss in Frankfurt at

To contact the editor responsible for this story: Benedikt Kammel at

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