Contractor expenses to develop software are also R&D. As would cloud expenses for your test environment, probably. More likely, companies will engage in activities that are arguably not "software development," including things like maintaining existing software.
Presumably if a company doesn't build software in-house and "buys a product", then that's not R&D? Then, the companies making said "products" would be based in countries that don't have such draconian laws...
