North American companies devote the largest part of their digital budget to the marketing function (25%), while Latin American firms devote far less: 18%. Asia-Pacific companies carve out 16% of their spending for the R&D group – about two percentage points higher than North American and European companies, and four points more than Latin American firms. (Exhibit II-13.) Asia-Pacific companies also spend more of their budget on the manufacturing/production function – 14.5% vs. 11% in North American and about 12% in European companies.
Digital awareness – and spending – is growing at different speeds across the four regions. As Europe’s largest economy (and number four in the world), Germany has long relied on its strong manufacturing base to produce a steady stream of goods, which it exports to other eurozone members. The country’s digitization efforts are naturally focused on creating so-called smart factories, integrating production with customers and suppliers. No doubt as an outgrowth of that orientation, German companies spend less than almost all other countries (except for Brazil and Mexico) on marketing (19% of digital budgets) and more on sales (20%), a familiar function.
France projects spending the greatest amount of its digital budget over the next three years on customer service (19% versus global average of 16%). French companies also spend the highest percentage of their functional digital budget on R&D – (21%), a figure it shares with the much-bigger Australia.
Exhibit ll-13: How the Regions Distribute the Functional Digital Budget