Industrialists assess feasibility of three per cent R&D spending target

December 2, 2002

Brussels, 29 Nov 2002

'R&D investment is not a goal in itself - it is a key vehicle for achieving the most competitive and dynamic knowledge-based economy by 2010.' This is a conclusion by the European Round Table of Industrialists (ERT) in a paper examining how the EU target of raising investment in research to three per cent by 2010 is.

The ERT's members, who account for more than 13 per cent of total research and development (R&D) spending, expect to transfer an increasing share of the (R&D) outside Europe because of what they perceive as unattractive investment conditions within the EU.

A survey of the members shows that the majority intend to either maintain or raise only slightly their current level of R&D investment in Europe. If this trend is also witnessed in other companies and if the GDP also continues to rise, then private EU R&D spending as a percentage of GDP will fall.

This will no doubt be disappointing news for EU Research Commissioner Philippe Busquin, who put forward the proposal for the three per cent target. The conclusion that the target is a vehicle for improving competitiveness is, however, in line with the Commissioner's own views. He has often asserted that while the three per cent figure may be unobtainable for some countries, having the target will encourage governments to act.

ERT companies do however expect to increase their investment in R&D outside Europe. They cite human resources and infrastructure, financial incentives and overall legislation and regulation as the factors which make Europe 'unattractive'.

In order to address Europe's unattractiveness, the ERT has put forward a number of proposals, which include investment in centres of excellence, an increase in public spending on R&D and better legislation covering intellectual property rights.

R&D centres of excellence should be developed in key industrial fields such as information and communication technologies, says the ERT, and to fill those centres, educational priorities and policies should be reformed, immigration restrictions eased for those with the relevant skills and the attractiveness of a scientific career boosted by tackling cultural bias. The ERT is also calling for the promotion of public/private partnerships through rewards and the facilitation of mobility between public and private entities.

Members of the ERT are calling for higher public investment in R&D so as to encourage more private R&D spending. ERT companies believe that Europe is hindered, in comparison with the USA, on account of tighter rules on subsidies.

The ERT also concludes that companies need greater regulatory clarity and certainty and that research is being stifled in key areas of future competitiveness such as genetically modified organisms (GMOs). The answer is to improve intellectual property rights, agree on a Community patent and reduce regulatory constraints, says the ERT.

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CORDIS RTD-NEWS/© European Communities, 2001

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