European companies set to increase their R&D investment over the next three years, Commission survey shows

September 4, 2006

Brussels, 23 August 2006

A recent survey of European companies about their R&D investment shows that these companies expect their global investments in R&D to grow by roughly 5% a year over the next three years. This contrasts with growth of just 0.7% for R&D investment reported in the 2005 Scoreboard [1] . The European Commission questioned more than 400 companies in ten major industrial sectors about their R&D investment intentions. The survey also gives an insight into other aspects of private companies’ decisions about their R&D activities, such as the incentives that lead companies to invest in R&D, the factors that lead to a decision as to where their R&D operations are located and the sources of finance. Companies that do not invest in R&D were also asked about their reasons for not doing so.

"If we are to reach our objective of investing 3% of GDP in research and development, we need increased investment by the private sector,” said Janez Potočnik, European Commissioner for Science and Research. “For this reason the results of this survey are encouraging. We need to maintain and reinforce our efforts at European and national level to make Europe an attractive place for companies to carry out their research. The Commission will be coming forward with some more ideas in this area in autumn 2006.”

The survey gives new insights into company expectations about future R&D investments. It shows that companies expect their R&D investment to grow at a rate of around 5% a year. This represents a considerable improvement over recent years. At that growth rate, European companies would be doing at least as well as their US counterparts in terms of R&D investment for the first time in several years [2] .

The survey confirms the view that companies continue to prefer to locate R&D activities in their home-country. Therefore, the top locations for R&D activity in Europe continue to be Germany, the United Kingdom and France (fig 1). Outside the EU, the US remained by far the most attractive place for locating R&D activity, followed by China and India (fig 2).

The survey further highlights the main drivers of R&D location worldwide as access to markets and availability of trained researchers. Labour costs of researchers, though often cited as a factor, seem to have quite low influence on such decisions.

Companies in the survey outsource an average of 18% of their R&D activity. Around two thirds of this goes to other companies and one third to public research organisations. The sector which out-sources most of its R&D is pharmaceuticals and biotechnology (25%), and the least is IT hardware (5%).

Figure [ Figures and graphics available in PDF and WORD PROCESSED ]: Popularity index* of countries in the EU as locations for R&D investment
[ Figures and graphics available in PDF and WORD PROCESSED ]* Country mentioned as most favourable country = 3 points, as 2nd = 2 points, as 3rd = 1 point. Includes only countries mentioned at least five times. (Source: European Commission DG JRC-IPTS)

Figure [ Figures and graphics available in PDF and WORD PROCESSED ]: Popularity index* of countries outside the EU as locations for R&D investment
[ Figures and graphics available in PDF and WORD PROCESSED ]* Country mentioned as most favourable country = 3 points, as 2nd = 2 points, as 3rd = 1 point. Includes only countries mentioned at least five times. (Source: European Commission DG JRC-IPTS)

Background:

The EU Survey on R&D Investment Business Trends was carried out by the European Commission in the second half of 2005 as part of the Commission's Industrial Research Investment Monitoring (IRIM) project.

The survey results are drawn from 449 responses sampling firms in ten sectors: automobiles & parts, chemicals, electronic & electrical equipment, engineering & machinery, food producers & processors, health, IT hardware, pharmaceuticals & biotechnology, steel & other metals, and support services.

Taken together, the 449 responding companies are responsible for a total global R&D investment of almost €30 billion, which is a significant share of European business investment in R&D.

For more information see:

http://iri.jrc.es

IP/05/1557 and MEMO/05/471 : 2005 EU Industrial R&D Scoreboard

[1] The 2005 EU Industrial R&D Investment Scoreboard (see: http://iri.jrc.es/ )

[2] See the expectations of large US companies: “Industrial Research Institute’s R&D Trends Forecast for 2006”, Research and Technology Management, 49, 1, January-February, 2006

Item source: IP/06/1118 Date: 23/08/2006

You've reached your article limit

Register to continue

Get a month's unlimited access to THE content online. Just register and complete your career summary.

Registration is free and only takes a moment. Once registered you can read a total of 3 articles each month, plus:

  • Sign up for the editor's highlights
  • Receive World University Rankings news first
  • Get job alerts, shortlist jobs and save job searches
  • Participate in reader discussions and post comments
Register

Have your say

Log in or register to post comments