Increased Investments but mainly outside Europe

23.09 2011

Corporate R&D spending on the up, but biggest rises will be outside the EU

Science|Business reporting


Global R&D investment by companies in Europe will grow by 5 per cent per year from 2011 to 2013, but most of this will be spent outside the EU.


The top R&D investing companies based in the EU expect their global research and development spending to grow by 5 per cent per annum from 2011 to 2013. This is more than double last year’s expectations, and represents a significant upturn from the 2.6 per cent cuts in R&D spending by the same companies in 2009.


But most of this increase will go outside the EU, with the largest rise in R&D investment foreseen for China, with 25 per cent growth. Japan will see an increase of 17 per cent, while in European countries outside the EU R&D investment will rise by 8 per cent. R&D investment in India will also rise by 8 per cent, and in the US and Canada 5 per cent.


Meanwhile investment inside the EU is expected to grow 3 per cent a year over the next three years.


In terms of hard cash, R&D investment will increase by €2.2 billion over the next three years in the EU, and by €2.7 billion outside the EU, according to the annual survey carried out by the EU Joint Research Centre’s Institute for Prospective and Technological Studies.


This sixth EU Survey on R&D Investment Business Trends, published earlier this month, includes responses from 205 companies. Taken together, these 205 companies are responsible for R&D investment worth almost €40 billion, constituting around 30 per cent of the total R&D investment by the 1,000 companies that feature on the EU’s Innovation Scoreboard.


Although the rate of growth is lower in the EU than in other regions, the companies surveyed locate 75 per cent of their overall R&D investments in the EU.


Máire Geoghegan-Quinn, Commissioner for Research, Innovation and Science, said the survey provides positive economic news and grounds for cautious medium-term optimism. “But if we are to achieve our Europe 2020 targets, including getting R&D investment in the EU up to 3 per cent of GDP, we will need these forecast investments for 2011-13 to be delivered in practice,” she said.


There will also need to be further increases in the rate of growth of private R&D investment in subsequent years, both by the large companies in the survey, and by SMEs.


The trend to increase spending outside the EU was also evident in three out of four previous surveys. The report says this shows EU-based companies want to benefit from the growth in emerging economies while still retaining a strong overall focus on the EU.


The leading factors highlighted as having a positive effect on innovation are the availability of qualified personnel and of public support such as grants and fiscal incentives. The opportunity to collaborate with academic partners was also seen as important.


As ever, one of the main negative factors across all sectors, is the cost of obtaining and protecting intellectual property rights.


The EU Survey on R&D Investment Business Trends: