European R&D draining to US

June 27, 2003

European companies are increasingly spending their research and development budgets in the US with "dire" consequences for the European economy and its universities, a conference of leading European universities heard this week.

Guy Haug, principal administrator to the European Commission's directorate of education, said that such a move would be extremely serious for European universities, which he described as "dramatically underfunded".

Speaking at the Europaeum conference on university partnerships, Mr Haug revealed details of a paper presented to the European Council earlier this year from the highly influential European Round Table of Industrialists.

The paper calls on Europe to invest in centres of excellence and to raise the status and supply of scientists, to increase public spending to encourage more R&D spending, and to legislate for improved protection of intellectual property. It also calls for red tape holding back development of new products and technologies to be cut.

The paper, titled The European Challenge, asks: "How can Europe benefit from a skilled labour force if its universities are underfunded, its educational systems undermotivated, and its centres of excellence few and far between?"

A survey of the round table's 45 members found that a majority of companies plan to either maintain or raise only slightly their level of R&D spending in Europe.

"The implications are dire given that the EU's R&D effort must almost double to attain the target set by the European Council in Barcelona (to increase R&D spending from the current level of 1.9 per cent to 3 per cent of a rising GDP), with the private sector providing two-thirds of the additional R&D investment," it says.

Gerard Kleisterlee, president and chief executive officer of Royal Phillips Electronics, said: "To get the best researchers, we are recruiting worldwide for our research laboratories and, partly for the same reason, an increasing part of our R&D effort is based outside the EU." The report says the EU approach to research remains highly fragmented, with too few centres of excellence.

"Although Helsinki, Munich, Cambridge and Sophia Antipolis represent some of Europe's growth centres, they do not yet rival the North Carolina, New Jersey, Virginia triangle, or Boston or the Los Angeles area, let alone Silicon Valley, for attracting the best global brains," it says.

In clear echoes of the government's January white paper on higher education, the report says: "There is a need to promote entrepreneurial culture inside research communities and to expand links between academic research and the wider economy."

Chris Patten, European commissioner and chancellor of Oxford University, said: "The brutally simple statistic is that the US has 4 per cent of the world's population but 50 per cent of the world's R&D spend." He said Europeans often pointed to the private investment in US universities, failing to realise the huge public investment.

But the report points to some good news. In the 1990s Europe managed to catch up and overtake the US in terms of the number of new science graduates.

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