European Business to Increase R&D Spending Despite Crisis

The front runner is the software and computer services sector, which expects R&D investment to grow by 11% per year on average. In-house R&D is seen as the most relevant driver of innovation by the surveyed companies, followed by market research and related activities for new product introduction.

21 Aug 2012 --- Top EU businesses expect their investments in research and development to grow by an average of 4% annually over the period 2012 to 2014, according to a Commission survey of some of Europe's companies that invest the most in R&D. The figures show the importance that these companies place on R&D as a key factor for their future growth and prosperity, despite the current economic difficulties. The front runner is the software and computer services sector, which expects R&D investment to grow by 11% per year on average. In-house R&D is seen as the most relevant driver of innovation by the surveyed companies, followed by market research and related activities for new product introduction.

"This positive trend for corporate R&D investment is essential for European competitiveness," said Máire Geoghegan-Quinn, Commissioner for Research, Innovation and Science. "These companies are the main drivers in making the European economy more knowledge-based and smarter. Our future research and innovation programme, Horizon 2020, will give a further boost to innovative enterprises."

When asked about effects of policies and external factors on their innovation activities, surveyed companies highlighted the strong positive effects of fiscal incentives, national grants, EU financial support and public-private partnerships both at national and EU level. In contrast, the time needed to obtain intellectual property right protection and the costs of that protection were seen by many companies as key factors impacting negatively on their innovation activities. This confirms the importance of an efficient IPR regime for fostering companies’ innovation activities.

The surveyed companies were also asked about the importance of various ways to share knowledge. Collaboration agreements with other companies stand out as the most important. For companies active in high R&D intensity sectors, this is followed by licensing in/out with other companies, and then agreements with higher education institutions and other public research organisations. For companies in medium and low R&D intensity sectors, collaboration agreements with higher education institutions and other public research organisations are seen as more important than licensing. In general, the results show the strong importance given to these various ways of sharing knowledge by many companies, which could be a sign of the increasing role of open innovation.

The EU Survey on R&D Investment Business Trends was carried out by the European Commission's Joint Research Centre (JRC) at the Institute for Prospective Technological Studies (IPTS) and the Directorate General for Research and Innovation.

The survey results are based on 187 responses of mainly larger companies from the 1,000 EU-based companies in the 2011 EU Industrial R&D Investment Scoreboard (IP/11/1205 and MEMO/11/705). These responses were collected between 16 January and 28 April 2012.

Taken together, these 187 companies are responsible for R&D investment worth almost €45 billion, constituting around 40% of the total R&D investment by the 1,000 EU Scoreboard companies, which is a significant share of European business investment in R&D. The 4% average growth level is slightly down on the 5% growth expected in the previous survey, reflecting the worsening of the economic context.

By end-2012 the European Commission will publish its next EU Industrial R&D Investment Scoreboard, which ranks the worldwide biggest companies investing in R&D.