EU spends more on research

Despite the economic crisis, European companies spent on average 8.1% more on research and development in 2008 than they did in 2007 – roughly the same annual increase two years running.

American and Japanese businesses, the EU’s biggest rivals in R&D spending, also stepped up investment in new product creation, but the increase – 5.7% and 4.4% respectively – was not as great.

This was the second year running that the R&D growth rate for EU companies was higher than for US companies. The EU also outpaced Japanese companies for the fourth consecutive year.

R&D investment is essential to remain competitive in the global economy. European research commissioner Janez Potočnik welcomed the results: “This is the best strategy to emerge stronger out of the crisis.”

The trends are highlighted in the EU’s 2009 R&D investment scoreboard, a ranking of 2 000 companies (1 000 from the EU, others mostly from the US and Japan) that represent 80% of R&D spending by businesses worldwide.

Two EU companies – Germany’s Volkswagen and Finland’s Nokia – and five US companies – including Microsoft, General Motors and Pfizer – are among the top 10 R&D investors. The world’s biggest single investor was Japan's Toyota, with €7.61bn.

Although European companies are pumping money into R&D at a faster rate than their US and Japanese rivals, they still spend less in real terms. European investment as a percentage of sales was 2.7% in 2008, compared with 4.5% in the US and 3.4% in Japan. Those numbers are similar to 2007.

US companies increased their lead over the EU in sectors where R&D is most intense – pharmaceuticals, biotechnology, information and communication technologies. But spending on alternative energy is growing and dominated by EU companies.

Globally, industrial R&D investment grew by 6.9% – less than in 2007 (9%) and 2006 (10%).

Companies from emerging economies account for a small share of the total investment, but that is changing. China spent 40% more on R&D last year than in 2007, India 27.3 % and Taiwan 25.1%.