send via emailEuropean business brings research spending home
European companies are increasing their spending on R&D more quickly than the rest of the world in the downturn, but are focusing their investments closer to home, according to a survey by the European Commission.
The Commission’s fourth survey on trends in business R&D investment drew on results from 130 companies listed in the 2007 EU Industrial R&D Investment Scoreboard. Together they spend almost €40bn on R&D, or 30% of the total R&D investment made by the 1000 companies on the Scoreboard.
The survey found that EU-based companies expect to increase their R&D investment by 4% a year in 2009, 2010 and 2011. This compares with growth expectations of more than 7% a year in the 2007 survey, and reflects the impact of the economic crisis as seen at the end of 2008 when the survey was carried out.
The survey also appears to show a re-concentration of R&D spending in Europe. The companies polled expected to grow their R&D investment within the EU by 4.6%, ahead of investment in Japan (4.4%), the US and Canada (4.3%), other (non-EU) European countries (3.8%), India (3.2%), rest of the world (3.1%) and China (2.5%). In the 2007 survey, the companies polled had expected to increase R&D spending in the EU by 6%, with spending growth in the US and Canada at 10%, in Japan at 15%, and in India at 17%. So R&D locations outside the EU that had showed the highest growth expectations now face the deepest cuts.
The responding companies carry out more than 20% of their R&D outside the EU. The largest share of foreign R&D investment, at almost 10%, goes to the US and Canada. China and India receive just 2.7% and 3.5%, respectively, of the polled companies’ R&D investment, making current concerns about the globalisation of R&D appear to be overstated.
The current recession has also highlighted the fact that companies still prefer to do their R&D in their headquarters countries. Two thirds of the companies surveyed considered their home country the most attractive location for R&D, up from half of them last year, due to a decreasing preference for China and India.
Germany was most often listed as the most attractive country for expanding R&D investment outside the home country, just ahead of the US and India and followed by China, with many fewer mentions than in previous surveys.
The survey found that the main drivers for investment in R&D outside the home country were the availability of researchers, access to specialised R&D knowledge and proximity to other company activities.
The relative importance of public policies for R&D activities differs among sectors: tax incentives seem more important for companies with high R&D intensities, as one might expect, while product market regulation and other legal frameworks matter most to the companies who do proportionately less R&D.
The 2008 EU Survey on R&D Investment Business Trends is part of the Industrial Research Investment Monitoring activity run jointly by the Joint Research Centre (JRC) and the Directorate General for Research (DG RTD) of the European Commission. The work was carried out by the JRC´s Institute for Prospective Technological Studies, under the overall monitoring and guidance of Directorate C (European Research Area: Knowledge-based economy) of DG RTD.