EU Predicts R&D Investment Growth by 2013

Wednesday, August 10, 2011

Top R&D investing companies based in the EU expect their global research and development (R&D) investments to grow by 5% annually from 2011 to 2013. This is more than double last year's expectations, and represents a significant upturn from the 2.6% R&D cuts in investment implemented by these companies in 2009. The companies surveyed also revealed that an average of 27% of their annual sales comes from innovative products introduced in the past three years, demonstrating again that innovation is the key to commercial success and to job creation.

These figures were published today by the European Commission in its sixth EU Survey on R&D Investment Business Trends, a survey of the R&D investment expectations of the 1000 European companies which invest most in R&D. 205 companies responded, providing a substantial sample.

Máire Geoghegan-Quinn, Commissioner for Research, Innovation and Science, said: "The survey provides welcome positive economic news and grounds for cautious medium-term optimism, given that business R&D is a key driver of sustainable growth and jobs. But if we are to achieve our Europe 2020 targets, including getting R&D investment in the EU up to 3% of GDP, we will need these forecast investments for 2011-13 to be delivered in practice. We will also need further increases in the rate of growth of private R&D investment in subsequent years, both by the big companies covered in this survey and by SMEs. And we will need to deliver an Innovation Union in Europe so that investing in R&D here is more attractive than doing so elsewhere."

Companies surveyed expect their R&D investment inside the EU to grow 3% a year over the next three years. Although this rate is lower than the growth expected for their R&D investment in other world regions, the companies still expect to locate 75% of their investments in the EU. They expect to make the largest percentage increases in R&D investment in China (25%), Japan (17%), other European countries (8%), India (8%) and the US and Canada (5%).

This trend – the same in three out of four previous surveys – shows that EU-based companies want to benefit from the growth in emerging economies while still retaining a strong overall focus on the EU. This is confirmed by the companies' figures for nominal R&D investment amounts, which are set to increase by €2.2 billion (almost $3.2 billion) over the next three years in the EU and €2.7 billion (nearly $3.9 billion) outside the EU.

Top factors indicated as having a positive effect on innovation were the availability of qualified personnel and of public support such as grants and fiscal incentives. Collaboration with other entities, such as higher education institutions, was also seen as important.

Factors perceived as negative for all sectors were enforcement costs of Intellectual Property Rights (IPR) and the time needed to obtain IPR protection. This highlights the importance of fostering an innovation-friendly IPR regime– the proposed unitary EU patent will be a significant step forward in this respect.

In October 2011, the European Commission will publish its next EU Industrial R&D Investment Scoreboard, which ranks the biggest 1000 EU and 1000 non-EU companies investing in R&D on the basis of actual investments in 2010.

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