Global Economics

European Firms Still Lag in R&D Spending


According to a new report, EU companies are not making a commitment to research and development and remain behind the U.S. and other countries

Only three EU companies have made it to the global top ten for investors in research and development, according to an EU report on R&D investment.

The report lists the top 1,000 R&D investors in the EU and compares their research spending with the top 1,000 investors outside the EU.

Together, these 2000 companies represent more than 85% of corporate R&D spending in the world.

Only three EU companies were able to obtain a place in the top ten R&D investors: car giant DaimlerChrysler (5th) -- a traditional European highflyer that spends about €5.2 billion -- pharmaceutical company GlaxoSmithKline (7th) and engineering firm Siemens (8th).

US companies dominate the list -- five in the top ten, and the first four of the top five -- with pharmaceutical company Pfizer being the champion on R&D spending.

The increase in corporate investment in research among top firms was only 7.4% for 2006-2007 in the EU, as opposed to 11.1% globally, according to the European Commission report.

Annual monitoring since 2004 has shown that companies are unable to follow the pace set by their non-EU counterparts.

In 2005, for example, EU-based firms increased their spending by 5.3%, non-EU firms by 7.7%.

In addition, the number of companies that have upped the sums invested in research is 10% higher outside the EU.

While the commission welcomed the growing corporate R&D expenditure within the EU, it warned that more should be done.

"The positive trend in R&D investment seen in the last two years is encouraging," said science commissioner Janez Potocnik.

"But we should not allow ourselves to be complacent -- quite the opposite: we should reinforce the positive measures already taken to consolidate and improve private investment in R&D," he added.

The comparison of research spending between the EU and the rest of the world is considered to be one of the main indicators to determine whether the EU will become the most competitive economy by 2010 -- an EU goal set out in the Lisbon strategy.

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