Archive:Europe 2020 indicators - research and development

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Data from March 2016. Most recent data: Further Eurostat information, Main tables. Planned article update: June 2017.

This article is part of a set of statistical articles on the Europe 2020 strategy. It provides recent statistics on research and development (R&D) and innovation in the European Union (EU).

The Europe 2020 strategy is the EU’s agenda for growth and jobs for the current decade. It emphasises smart, sustainable and inclusive growth as a way to overcome the structural weakness in Europe’s economy, to improve its competitivenes and productivity and to underpin a sustainable social market economy.

R&D and innovation are key policy components of the Europe 2020 strategy. Having more innovative products and services on the market addresses two objectives of the strategy’s smart growth goal: job creation through increased industrial competitiveness, labour productivity and the efficient use of resources; and finding solutions to societal challenges such as climate change and clean energy, security and active and healthy ageing.

Europe 2020 strategy target on R&D

The Europe 2020 strategy sets the target of ‘improving the conditions for innovation, research and development’ , in particular with the aim of ‘increasing combined public and private investment in R&D to 3 % of GDP’ by 2020 .

The analysis in this article focuses on the headline indicator ‘Gross domestic expenditure on R&D’, which monitors the strategy’s research and development target. Fundamental enabling factors which drive innovation are also discussed. These are the first link in the innovation chain and include R&D investment by EU Member States and the way it is financed by the various public and private societal actors. The role of education, in particular tertiary education, in providing the necessary science and technology skills to the workforce is also highlighted. This is followed by a look at the EU’s performance concerning business frontrunners, their innovative capacity, and the technological output at the end of the innovation chain in terms of commercialisation and the relevance to societal challenges.

Key messages

• Between 2002 and 2007, the gross domestic expenditure on R&D as a percentage of GDP was relatively stable in the EU at 1.8 %. Since then, it has grown marginally, reaching 2.03 % in 2014. The EU remains at a distance from its Europe 2020 target of 3 %.
• The EU increased its output of tertiary graduates in science and technology by 17.9 % between 2008 and 2012.
• Employment in knowledge-intensive activities increased in almost all EU Member States, however, the United States and Japan are still outperforming the EU in that respect.
• Between 2007 and 2015 broadband internet access increased substantially in the EU, reaching 80 % of households and 95 % of businesses.
• However, the level of digital skills of the EU population seems insufficient. In 2015, 55 % of the EU population reported at least basic overall digital skills and 74 % at least basic digital communication skills.
• The EU has become more innovative, with almost half of EU’s firms having reported innovation activity in 2012. Sweden, Denmark, Finland and Germany ranked as ‘innovation leaders’ in 2014.
• The number of patent applications in the EU increased between 2002 and 2007 but was interrupted by the economic turmoil in 2008.
• High-tech exports to outside the EU have recovered since the global economic crisis, increasing by more than 40 % between 2009 and 2014.

Figure 1: Indicators and concepts presented in this article

Main statistical findings

How much is the EU investing in R&D?

Figure 2: Gross domestic expenditure on R&D (R&D intensity), EU-28, 2002-14 (¹)
(% of GDP)
Source: Eurostat online data code (t2020_20)

The headline indicator ‘ gross domestic expenditure on R&D’ shows the proportion of GDP dedicated to research and development . It is also referred to as ‘R&D intensity’ and reflects the extent of research and innovation undertaken in a country in terms of resources input.

Figure 2 shows a prolonged stagnation of gross domestic expenditure on R&D at around 1.81 % of gross domestic product (GDP) for the period 2002 to 2007. By 2009, at the onset of the economic crisis, R&D intensity had increased to 1.94 %. Since 2011 it has continued to grow marginally, stabilising at 2.03 % in 2013 and 2014. One of the reasons for the increase between 2007 and 2009 include GDP falling more rapidly than overall R&D expenditure (see the Innovation Union Competitiveness Report 2011) . Between 2007 and 2009 GDP fell by 5.1 % in the EU-28, whereas R&D expenditure was reduced by 3.4 % only. Actions taken by individual Member States to step up public R&D investment in times of weak GDP growth have also helped increase R&D intensity in that period. In 2009, many Member States sustained nominal growth in public R&D expenditure to counter the impacts of the crisis on private investment (see the Innovation Union Competitiveness Report 2013). Despite the increases in public and private R&D expenditure over the 2007-2014 period, the EU has moved off track in reaching its 3 % R&D target. Estimates show that in order for the 2020 R&D target to be met, the annual growth rate of EU R&D intensity would need to increase by more than three times compared to the 2007-2014 period — 6.7 % vs 1.9 % (see Science, Research and Innovation Performance of the EU). At the global level the EU is still lagging behind other players, such as the United States, Japan and South Korea, in terms of R&D expenditure, with only the best performing Member States surpassing the United States (see Figure 3).

Member States stepping up R&D spending

Figure 3: Gross domestic expenditure on R&D (R&D intensity), by country, 2008 and 2014 (¹)
Source: Eurostat online data code (t2020_20)

Figure 3 shows a rather varied picture of R&D intensity in the EU Member States. In 2014, R&D intensity ranged from 0.38 % to 3.17 % across the EU. Northern European Member States such as Finland and Sweden not only share a pattern of high expenditure, they have also adopted the most ambitious national targets. In 2014, Denmark achieved its national R&D target of 3 % and the Czech Republic reached 2 % of government R&D intensity, twice the national target of 1 %. Cyprus and Germany came very close to meeting their national targets of 0.5 % and 3 %, respectively. Lower R&D intensity levels, below 1 %, were mostly recorded in Member States in eastern and southern Europe, for instance in Romania, Cyprus, Greece and Malta. The large variance in R&D spending between Member States might be explained to some extent also by structural factors such as the varying share of R&D intensive sectors in the Member States.

The financial crisis and its adverse impact on GDP growth in the following years, along with a rise in nominal government spending on R&D, led to an increase in R&D intensity in most Member States between 2008 and 2014. The exceptions were Romania, Luxembourg, Portugal, Finland, Croatia, Sweden and Spain. Growth in R&D expenditure over the same period has been most pronounced among countries with generally low R&D spending such as Slovakia, Bulgaria, Malta and the Czech Republic. The observed trends show that most Member States have put R&D investment high on the policy agenda for combating the effects of the crisis. However, despite these increases most Member States would require significant acceleration of R&D intensity growth in order to be able to meet their respective national targets (European Commission, 2016, p.36).

The business sector remains the largest source of R&D investment

Figure 4: R&D expenditure, by sectors of performance, EU-28, 2014 (¹)
(%)
Source: Eurostat online data code (rd_e_gerdtot)

Figure 5: Gross domestic expenditure on R&D, by sector of performance, EU-28, 2002-14
(% of GDP)
Source: Eurostat online data code (rd_e_gerdtot)

Table 1: Gross domestic expenditure on R&D, by sector of performance, EU-28, 2006-14 (¹)
(% change over previous year) (²)
Source: Eurostat online data code (rd_e_gerdtot)

R&D activities are carried out by four main institutional sectors: business enterprise, government, higher education and private non-profit. Figure 4 shows the distribution of R&D expenditure between the four R&D sectors in the EU in 2014. The two sectors with the highest expenditure on R&D in the EU were the business enterprise sector, making up 63.9  % (EUR 180.7 billion), and the higher education sector, making up 23.2 % (EUR 65.6 billion) of total R&D expenditure in 2014.

Although with a more modest share of 12.2 % (EUR 34.4 billion), the government sector plays an important role, especially in terms of the long-term stability of R&D expenditure. The size of the private non-profit sector is almost negligible, accounting for less than 1 % of the total (EUR 2.3 billion).

Between 2002 and 2014, R&D expenditure as a percentage of GDP in the EU grew across all sectors, apart from the private non-profit sector (see Figure 5). Despite certain deviations, the share of business spending in GDP increased the most, by 0.14 percentage points. The higher education sector displayed the second largest increase, of 0.07 percentage points, followed by a 0.01 percentage points increase in the government sector.

When the financial and economic crisis hit the EU in 2008, some Member States such as Malta, Luxembourg, Estonia, the Czech Republic, Denmark, Germany, Austria, Croatia, Slovenia and Poland (see the Innovation Union Competitiveness Report 2013) maintained or increased their public R&D expenditure. The aim was to stimulate economic growth and encourage private R&D investment, which remains the largest source of R&D expenditure. Overall, in the EU government sector R&D expenditure as a share of GDP grew by about 0.02 percentage points or 3.1 % between 2008 and 2009 (see Figure 5 and Table 1) and remained constant at 0.25 % in the following years in spite of the crisis. The same applied for higher-education expenditure, which grew by 0.04 percentage points or 4.4 % between 2008 and 2009 and remained relatively stable after the onset of crisis.

In comparison, R&D expenditure of the business sector fell by 2.6 % between 2008 and 2009 (see Table 1). Businesses usually decrease the amount they spend on R&D during an economic crisis as a cost-reduction strategy in time of economic pressure and tight credit constraints . However, in relative terms between 2008 and 2010 the EU business sector maintained its R&D expenditure at about 1.2 % of GDP. Business R&D expenditure started to rise again gradually after 2010, reaching 1.3 % of GDP in 2014.

In some countries, such as Cyprus, Slovakia, Greece, Latvia, Lithuania, Poland, Romania and Croatia, R&D efforts rely predominantly on the public sector — higher education and government (see Figure 6). This indicates that conditions for business R&D investment are still insufficiently attractive in those countries (European Commission, 2013, p.38). Although the public R&D system is of prime importance for generating the knowledge and talents needed by innovative firms, it is only through business R&D investment that the full impacts of R&D could be realised. These include, for example, production of innovative and greener products, processes and services that enable higher labour productivity, industrial competitiveness, resource efficiency and reduced environmental impacts. Therefore, apart from strengthening public R&D expenditure, efforts for improving the broader innovation system and putting the right framework conditions for business R&D in place are an essential part of public policies (see Science, Research and Innovation Performance of the EU

Figure 6: Gross domestic expenditure on R&D, by sector of performance, by country, 2014
(% of GDP)
Source: Eurostat online data code (rd_e_gerdtot)

The role of counter-cyclical public R&D investment policy

While private investment — including R&D expenditure — typically follows cyclical patterns in relation to GDP growth, public or government-financed R&D investment usually follows a counter-cyclical trend. The aim is to both stimulate economic growth and to encourage private R&D investment.

During the economic crisis of 2008 to 2009, the European Commission and some Member States took coordinated action to increase public R&D expenditure. Despite severe budgetary constraints, government R&D funding grew faster (or decreased less) than GDP during the crisis in half of the Member States: Malta, Luxembourg, Estonia, the Czech Republic, Denmark, Germany, Austria, Croatia, Slovenia, Poland, Cyprus, Finland, Sweden and Portugal (European Commission, 2013, p.41). As a result of efforts both at Member State and EU level, the EU’s public R&D sector has emerged slightly stronger from the crisis period.

In a significant number of EU Member States, direct government R&D funding is complemented by efforts to provide indirect support for business R&D through tax incentives (see Science, Research and Innovation Performance of the EU). Overall, for half of EU Member States, R&D tax incentives play either an important or a dominant role in addition to direct funding of business R&D, and these countries have increased their use during the crisis years (European Commission, 2016, p143). Beyond increases in public funding for R&D and more widespread use of tax incentives, European funds have provided important support for R&D financing, in particular through the EU Framework Programme and the EU Structural Funds. According to recent estimates, 69 % of the increase in public R&D expenditure in the period 2007-2012 resulted from increased national public spending, whereas 20 % could be attributed to “funding from abroad”, mainly from the EU budget (European Commission, 2016, p.28). Although most EU funds from Research Programmes flow to large, old, research-intensive Member States, their contribution to public funding has been substantial in several small new Member States with low R&D capacity (European Commission, 2016, p.145). Concerning Structural Funds, there has been an important shift in their use, with a growing share of these funds being channelled into R&D spending (European Commission, 2016, p.160).

On average Member States have managed to maintain the same budgetary share for R&D in total government expenditure, therefore achieving smart fiscal consolidation, without sacrificing the R&D budget to other government expenditure. However, substantial differences between Member States remain, with Estonia, Slovakia, Luxembourg, Portugal and Germany recording the largest increase in the share of R&D in government expenditure since 2007 (European Commission, 2013, p.41).

R&D intensity concentrated in regions in Germany, the United Kingdom, Nordic countries, Austria, Belgium and Slovenia

Map 1: Gross domestic expenditure on R&D, by NUTS 2 regions, 2013 (¹)
(% of GDP)
Source: Eurostat online data code (rd_e_gerdreg)

Map 2: Change in gross domestic expenditure on R&D, by NUTS 2 regions, 2007-13 (¹)
(percentage points difference between 2013 and 2007, % of GDP)
Source: Eurostat online data code (rd_e_gerdreg)

When analysing R&D intensity by region (see Map 1), a high level of R&D spending can be seen in 30 of the NUTS 2 regions in Germany (10 regions), the UK (four), Sweden (four), Austria (four) and Finland (three), followed by regions in Denmark and Belgium (two regions each) and Slovenia (one region each). Some research-intensive ‘clusters’ also become apparent: in, particularly there is a band of research-intensive regions running from Finland through southern Sweden into Denmark; another band runs from the United Kingdom, through Belgium into southern Germany; and a final band goes from Slovenia, through Austria and Switzerland into southern France and northern Spain. Geographical concentration of R&D activities is a common phenomenon. R&D clusters often develop around academic institutions or specific high-technology industrial activities and knowledge-based services, where they could benefit from a favourable environment and spillover of knowledge. Due to clusters many regions attract new start-ups and highly qualified personnel and develop a competitive advantage in specialised activities.

Three regions in the EU had a particularly pronounced R&D intensity. In 2013, the regions of Stuttgart and Braunschweig in Germany reached R&D intensity of 6 % of GDP and 7.3 % of GDP, respectively. Even higher was the share in Belgian’s Brabant Wallon province, where R&D intensity peaked at 11.4 % of GDP in 2013, more than five times and the EU average. It should be noted that this high share is partly explained by the high number of commuters from Brabant Wallon to the Brussels regions, who contribute to the GDP of Brussels and lower the GDP of Brabant Wallon. At the other end of the scale, the 42 regions with R&D intensity below 0.5 % of GDP mainly belong to southern or central EU Member States: Romania, Bulgaria, Greece and Poland (six regions each), Bulgaria (five regions), Portugal (four regions) and Spain (three regions).

The capital region recorded the highest levels of R&D intensity in 11 multi-regional EU Member States. In addition, in 20 countries, the capital regions’ R&D intensity exceeded the national average but was not necessarily the highest in the country. Only the United Kingdom, Belgium and the Netherlands clearly went against this trend, with national averages exceeding their capital regions’ R&D intensity. Regional disparities in R&D intensity within countries were largest in the United Kingdom, Belgium and Spain and smallest in Slovenia, Hungary and Croatia and the Netherlands.

Changes in R&D intensity over time are highlighted in Map 2. Of the 266 regions for which data is available, 59 experienced a decline in R&D intensity between 2007 and 2013. This decline was below one percentage point in all regions except for four regions in the United Kingdom, namely Essex, Lancshire, Cheshire and Kent. In one region in Romania, Sud-Vest Oltenia, the decline was marginal, at just 0.01 percentage points and in six regions the level of R&D intensity remained unchanged: Düsseldorf in Germany, Castilla-la Mancha in Spain, Champagne- Ardene in France, Umbria in Italy, Vest in Romania and West Wales and the Valley in the United Kingdom. In the remaining 201 regions, the increase in R&D intensity ranged between 0.01 percentage points and 4.63 percentage points (Belgian Brabant Wallon).

While EU funding seeks to target all regions, an innovation divide across EU’s regions remains. There appears to be a regional innovation paradox, whereby those regions characterised by established innovative activity maintain their position as innovative leaders (such as the Nordic countries), while those that trail behind fail to catch up, despite targeted funding and policy prescriptions .

How the EU strengthens its human capital and knowledge base

Current skill mismatches are a threat to EU’s innovation capacity at a time of increasing technological needs (also see the articles on 'Employment' and 'Education'). The demand for highly qualified people in the EU is predicted to rise by almost 16 million in the period up to 2020 according to the Researchers’ Report 2014. In particular, as emphasised by the European Commission, more human resources, such as scientists, researchers and engineers, are needed. To try to improve this situation, Horizon 2020, the European Research Area (ERA) and other policy initiatives aim to support researchers’ careers and mobility, attract young people to science, enhance the quality and efficiency of doctoral training and encourage partnerships between academia and industry (see State of the Innovation Union 2015).

Knowledge and skills are crucial for gaining new scientific and technological expertise and for building the economy’s capacity to absorb and use this knowledge (see Catalysing innovation in the knowledge triangle: practices from the EIT knowledge and innovation communities). R&D expenditure covers a substantial part of expenditure on skills and education and, therefore, constitutes a vital enabling factor for human capital. In this regard, the EU will need to train and employ at least one million new researchers compared with 2008 levels if it is to reach the R&D target of 3 %  (see Researchers’ report 2014).

Businesses and higher education institutions can work together to share knowledge. In particular, close and effective links between education and research and innovation stimulate the development of entrepreneurial, creative and innovative skills in all disciplines. They promote innovation in higher education through more interactive learning environments and increased knowledge exchange. Thus, close collaboration between the three ultimately contributes to the realisation of ERA and EU’s competitiveness, growth and job creation. Being the three key and interdependent drivers of the knowledge-based society, research, education and innovation are together referred to as the “knowledge triangle”  .

The number of science graduates in the EU is increasing

Figure 7: Tertiary graduates in science and technology by country, 2008 and 2014 (¹)
(Graduates per 1 000 inhabitants aged 20 to 29 years)
Source: Eurostat online data codes (tps00188) and (educ_uoe_grad04)

In line with EU’s declared intention to become the world’s most competitive science-based economy, a well-functioning research and innovation system is expected to promote excellence in education and skills development and ensure a sufficient supply of (post)graduates in science, technology, engineering and mathematics. Increasing the number of science graduates and jobs in knowledge-intensive activities would help to create a solid base for the EU knowledge economy and contribute to Europe 2020’s objectives by fostering EU’s innovation capacity, economic strength and employment.

Despite some challenges regarding science education — in particular disparities in basic science literacy and quality of science education, as well as gender imbalances in science education across countries and regions — the EU has a good basic education system (see Europe 2020 Flagship Initiative Innovation Union). A growing number of EU students graduate from tertiary education in science and technology.

Figure 7 shows how this trend has developed over the past years. Between 2008 and 2014 the number of tertiary graduates in science and technology grew by 25.5 %, from 14.5 graduates per 1 000 population aged 20 to 29 in 2008 to 18.2 graduates per 1 000 population in the same age groupin 2014. EU’s international position has also improved constantly since 2003 and it is now outperforming Japan and the Unites States. However, EU’s progress in tertiary education needs to be interpreted with caution since the growth in the number of science and technology graduates might be somewhat overstated by the Bologna effect. This effect results from students who firstly complete a bachelor and then a master degree being counted twice as tertiary graduates. Furthermore, concerning EU’s position in the world, one should also note that the cohort size in the EU has developed less dynamically compared to the US. Therefore, the EU has seen a relatively less positive trend in the absolute number of graduates.

At Member State level the trend varies considerably (see Figure 7). In 2014, the number of science and technology graduates ranged from about 24.7 per 1 000 inhabitants in Ireland to 3.5 per 1 000 inhabitants in Luxembourg and 9.2 per 1 000 inhabitants in Cyprus. The very low ratio of science graduates in Luxembourg and Cyprus might be explained to a large extent by the number of students who pursue their studies abroad. Since some of the graduates reported by a country may be foreigners who return home following their studies, this pushes up the ratio in the country where they studied and pulls down the ratio for their country of origin. In all Member States, except Finland, Lithuania and Romania, the rates have increased since 2008. Between 2008 and 2014, Malta and Cyprus more than doubled their rates, while the rate grew by more than 50 % in Austria, Slovenia, Spain and Hungary.

Empowering women in tertiary education and enhancing their employment opportunities in the R&D sector is also an essential part of EU’s research and innovation policy. Ensuring gender equality and taking a gender perspective in any planned action and activities at all levels in research is one of the European Commission’s main five priorities set out in the 2012 Communication ‘A Reinforced European Research Area Partnership for Excellence and Growth’ and a key element of the Horizon 2020 programme. Improving gender equality in science education could promote research, innovation and ultimately long-term growth by increasing the number of scientists and engineers. It is also important for reducing occupational segmentation in the labour force and improving gender equity in the labour market .

Despite the growth of female tertiary graduates in science over the past few years, women still engage in different fields of study than men and remain under-represented in science and technology fields in all Member States (see Figure 7). At the postgraduate level, the share of women in these fields declines further and yet again in the transition to the workplace. In 2012 women accounted for 47 % of top-level graduates (ISCED 6: post-graduate programmes above master’s level ) and in 2013 they held only 35.5 % of total research positions (She Figures 2015).

How is the EU performing with regard to employment in knowledge-intensive activities?

Figure 8: Employment rate in knowledge-intensive activities, by country, 2008 and 2014 (¹)
(% of total employment)
Source: Eurostat online data code (htec_kia_emp2)

Figure 9: R&D personnel by sectors of performance, EU-28, 2002014 (¹)
(%)
Source: Eurostat online data code (rd_p_persocc)

Figure 10: Total R&D personnel by sectors of performance, EU-28, 2002-14
(Full-time equivalents, % of the labour force)
Source: Eurostat online data code (rd_p_perslf)

The EU has been improving its academic tertiary education output. This has been complemented, to a varying extent, with national measures intended to attract a highly qualified workforce and human resources, including women, to science and research (see European Research Area, Facts and Figures for 2014). In the EU, the number of people employed in knowledge-intensive activities as a share of total employment increased slightly from 34.2 % in 2008 to 35.9 % in 2014. However, with rates of about 38 % the United States and Japan are still outperforming the EU in this area.

As shown in Figure 8, progress in the EU has been uneven and substantial differences between Member States persist. While in 2014 Romania (19.5 %), Bulgaria (27.8 %) and Poland (29.6 %) recorded relatively low employment rates in knowledge-intensive activities, Luxembourg (60.4 %), Sweden (43.9 %) and the United Kingdom (43 %) had a share considerably above the EU average. Ireland, Belgium and Malta recorded almost the same rate, at about 42 %.

As a general trend, between 2008 and 2014 the employment share in knowledge-intensive activities increased in all Member States (except for Italy, which maintained the same level). Countries where the share increased substantially were Luxembourg and Croatia (5.7 percentage points each), followed by Ireland, Portugal, Estonia, Spain.Cyprus, Malta, Greece, Slovenia, Latvia, Denmark and the Czech Republic. All of these experienced a period of continuous relative growth of 3.0 to 5.0 percentage points.

However, it should be noted that a growing share of employment in knowledge-intensive activities might not necessarily indicate that a country is moving toward a more knowledge-based economy. It could also be a result of total employment decreasing faster than employment in knowledge-intensive activities. In fact, this is the case with countries such as Bulgaria, Greece, Spain, Italy, Lithuania, Latvia, Netherlands, Romania and Finland, which in real terms experienced reductions in both total employment and in employment in knowledge-intensive activities between 2008 and 2014 .

In 2014, the female employment rate in total knowledge-intensive activities was 44 %, exceeding the men’s share in all countries . However, only 13.3 % of women were employed in EU knowledge-intensive business enterprises, compared with 14.5 % of men, highlighting the need for more efforts towards gender mainstreaming in the business sector. At the EU level, R&D personnel — including researchers and other staff employed directly in R&D — constituted 1.27 % of total employment in 2014. More than a half of R&D personnel (54.1 %) were employed in the business enterprise sector (see Figure 9). The higher education sector was the second largest employer of R&D personnel (31.6 %).

The EU is also committed to creating an attractive and open labour market for researchers. It has launched a series of policy initiatives for this purpose, including the EURAXESS network, the ‘Scientific Visa Directive’, a Human Resources Strategy for Researchers based on the Charter and Code, the Principles of Innovative Doctoral Training and support for a new pan-European supplementary pension fund for researchers (see Researchers‘ Report 2014).

Between 2002 and 2014 the share of R&D personnel in the labour force increased by 0.22 percentage points, from 0.92 % to 1.14 %. As shown in Figure 10, this trend was supported by growth in the share of R&D personnel in three of the four institutional sectors. However, the growth rate was quite different between sectors. In the business enterprise sector the share of R&D personell grew by 0.14  percentage points over the same period, followed by the higher education sector in which the share grew by 0.06  percentage points. The share in the government sector increased by only 0.01  percentage points. In the private non-profit sector the share remained stable at 0.01 %.

ICT connectivity and digital skills are central to a knowledge-based economy

Information and communications technology (ICT) skills and knowledge are essential for developing an effective research and innovation system. In that sense, they are an important part of the skills base needed in today’s interactive and connected world. Furthermore, ICT development and usage skills are an important driver for employment and R&D in the EU. The value added of the ICT sector, including information industries, accounted for around 4 % of GDP in 2012 (see Monitoring the Digital Economy and Society 2016-2021). In addition, in the same year the sector represented 2.8 % of EU total employment and accounted for 19 % of total R&D personnel in the labour force (European Commission, 2015). In 2012, R&D intensity in the ICT sector amounted to 5.6 % (European Commission, 2015). A series of high-level Europe 2020 initiatives address the issue of investment in digital technologies, in particular to increase connectivity and ICT skills of businesses and citizens, and the free movement of knowledge between science and business.

Connectivity is addressed by the flagship initiative ‘Digital Agenda for Europe’ , which contributes to the smart growth priority to boost citizens and businesses’ access to broadband. ICT skills are targeted by another flagship initiative, the ‘Agenda for new skills and jobs’. This facilitates the inclusive growth priority, supporting the improvement of e-skill levels in the labour force and the creation of jobs in the ICT sector overall. The flagship initiative ‘Innovation Union’ called for the completion of ERA by 2014, which should optimise the circulation, access to and transfer of scientific knowledge including via digital ERA (see European Research Area, Facts and Figures for 2013).

A large part of the EU population, however, still has poor digital literacy skills. This is holding back the large multiplier effect that ICT take-up has on innovations and productivity growth. These skills not only improve employability, they enhance societal learning, creativity, emancipation and empowerment.

Broadband internet connections have increased substantially

Figure 11: Households and enterprises with broadband access, EU-28, 2007-15 (¹)
(% of households and % of enterprises)
Source: Eurostat online data code (tin00089) and (tin00090)

Infrastructure availability is vital to diffusing the digital and knowledge-based economy into the very corners of society. Increasing broadband internet access for private and business use are an important enabling factor in this process. The share of households and businesses in the EU with broadband internet access rose considerably between 2007 and 2015, helped by technological advances, wider network coverage and increased affordability. The share of enterprises with access to broadband internet connections increased by 18 percentage points over the same period, from 77 % to 95 %. At the same time, the share of households enjoying broadband access increased by 38 percentage points, from 42 % to 80 % (see Figure 11).

At the national level, between 2007 and 2015, the share of both households and enterprises with broadband internet access increased in all countries. In 2015, the share of household connectivity exceeded the EU average in 12 Member States, with rates ranging from 81 % in Austria to 95 % in Luxembourg . The other 17 countries had lower access rates, from 59 % in Bulgaria to 79 % in Belgium. In general, the highest simple growth rates between 2007 and 2015 were mainly in eastern and southern European Member States. Some of these, such as Greece and Romania, had access rates in 2015 that were more than nine and eight times higher than in 2007, respectively. In 2015, the share of enterprises with broadband access varied from 100 % in Lithuania, Netherlands and Finland and 99 % in Denmark and Slovenia to 76 % in Bulgaria.

Digital competence is still not widespread in the EU

Figure 12: Individuals with at least a medium level of computer and internet skills, by country, 2015
(% of individuals)
Source: Eurostat online data code (isoc_sk_dskl_i)

As ICT has spread throughout different spheres of life ─ from education, workplace, leisre/entertainment, to communication, social interaction and health, digital competence has become essential for all individuals in a digital and knowledge-based society. Assuming that to be fully functional in the digital society, in terms of personal fulfilment and development, active citizenship, social inclusion and employment, one needs at least a basic level of digital skills, almost half of the EU population (45 %) could be considered as insufficently equipped with digital skills. The level of overall digital skills between Member States is still very dispersed, with the share of individuals with at least basic overall digital skills ranging between 86 % in Luxembourg and 26 % in Romania (see Figure 12). Nordic countries have some of the most digitally literate citizens, but basic digital literacy exceeds the EU average also in countries such as Luxembourg, Netherlands, the United Kingdom, Germany, Estonia, Austria, Belgium, France, Czech Republic and France. On the other end of the spectrum, a relatively large share of the population in eastern and southern European Member States shows limited digital skills. In ten Member States only 50 % or less of the population reports to have basic digital skills. In Romania and Bulgaria 74 % and 69 % of the population, respectively, reports to have no or limited digital competence.

Digital communication skills are equally important for being able to thrive in a technological, global environment. As shown on Figure 12, in 2015 the share of individuals with at least a basic level of digital communication skills in the EU surpassed that of individuals with at least basic overall digital skills – 74 % vs. 55 %. In all Member States digital communication skills were more prevalent among the population compared to overall digital skills. Not surprisingly, countries which rank high on overall digital competence also lead the ranking on basic digital communication skills. Almost the whole population of Luxembourg (95 %) reports basic digital communication skills, followed by the Netherlands (91 %) and the United Kingdom (89 %). Basic digital communication competence in Nordic countries is again above EU average as it is in Germany, Estonia, Austria, Belgium, Czech Republic and France. Although southern and eastern European Member States again report lower levels of digital communication skills, the shares of people with digital communication literacy in all countries are above 50 %. An interesting case in point is Ireland, which has a share of individuals with basic digital communication skills slightly above the EU average, but ranks below the EU average on overall basic digital skills. In Romania, the share of people with digital communication skills (52 %) is twice that of individuals with basic digital skills (26 %).

How are businesses bringing innovation and good ideas to the market?

A dynamic business environment is essential for the promotion and diffusion of innovations. The challenge is to make use of R&D through entrepreneurship and creativity to trigger innovation and economic competitiveness. Therefore, measures targeting knowledge diffusion and absorption of ideas and innovations, for example, through the creation of technology markets and licensing schemes, are just as important as investment in knowledge generation. The higher the uptake and use of ideas from R&D, the more likely those innovative players are to invest in future knowledge generation through increased private R&D expenditure. Innovators also help to create a more dynamic system. In many cases they contribute to the structural and technological changes needed to adapt to new circumstances and challenges. An example is the depletion of fossil fuels and the resulting transition towards more renewable energy sources.

Significant progress in achieving knowledge diffusion and absorption is measured through growth in the number of innovative firms, the amount of venture capital investment, the export of high-tech products and the number of patent applications, especially those related to high-tech products and societal challenges such as climate change.

Almost half of EU enterprises contribute to innovation activity

Figure 13: Enterprises by type of innovation, EU-28, 2012
(% of the total number of enterprises)
Source: Eurostat online data code (inn_cis8_type)

Figure 14: Innovative enterprises engaged in any type of co-operation, by country, 2012
(% of product and/or process innovative enterprises)
Source: Eurostat online data code (inn_cis8_coop)

An analysis of business innovativeness reveals that almost half of the EU’s enterprises have reported innovation activity in 2012 (see Figure 13). At country level, Germany (66.9 %) and Luxembourg (66.1 %) rank first in this respect, both having a share of innovative enterprises substantially above the EU average of 48.9 %. These are followed by Sweden (55.9 %), Ireland (58.7 %), Italy (56.1 %) and Belgium (55.6 %) . Innovative companies can be distinguished by the type of innovation they pursue. Figure 13 shows how different business strategies lead to different innovation types such as product and/or process as well as organisational and/or marketing innovation .

Innovation co-operation is an important determinant of enterprises’ innovation activity, productivity and growth. It measures the level of active participation with other enterprises or institutions on innovation activities, where both partners do not need to commercially benefit. Nearly a third (31.2 %) of EU enterprises that have developed and introduced product and process innovations were engaged in innovation co-operation in 2012. As Figure 14 shows, the highest share of cooperative enterprises were recorded in the United Kingdom (66.7 %), Cyprus (52.8 %) and Belgium (52.2 %) and the lowest in Italy (12.7 %), Malta (16.4 %) and Bulgaria (16.6 %).

Innovation performance has improved in most Member States

Figure 15: Innovation performance by country, 2014 (¹)
(Index)
Source: European Commission, Innovation Union Scoreboard 2015, Brussels, 2015

According to the Innovation Union Scoreboard, which provides a comparative assessment of the research and innovation performance of Member States using a composite indicator, the EU has become more innovative in recent years. The EU-28 innovation index has increased from 0.519 in 2007 to 0.555 in 2014 (see Innovation Union Scoreboard 2015). As a result the EU has decreased its innovation gap with two global innovation leaders – the United States and Japan — although the gap with the top innovator South Korea has been widening (European Commission, 2015).

In 2014, the improvement in innovation performance for the EU at large has stalled compared with the previous year. This has mainly been due to a decrease in innovation activities as measured by the Community Innovation Survey . A delayed negative effect of the economic crisis on business activities may also help explain this decline in innovation performance.

While innovation performance has been improving for most Member States between 2007 and 2014, differences are still high and are diminishing only slowly. Some convergence in innovation performance between Member States was observed in 2011, 2013 and in particular 2014 (European Commission, 2015).

The measurement framework of the Innovation Union Scoreboard provides a holistic picture of the innovation performance of Member States by distinguishing between three main types of indicators: innovation performance drivers external to the firm (enablers), innovation efforts at the level of the firm (firms’ activities) and the effects of firms’ innovation activities (outputs). These are composed of eight innovation dimensions, capturing in total 25 different indicators. Based on the average innovation performance, countries are classified into four distinct groups: innovation leaders, innovation followers, moderate innovators and modest innovators.

The overall ranking within the EU remains relatively stable. With performance well above the EU average, Sweden, Denmark, Finland and Germany are classified as the four ‘innovation leaders’. These countries have excellent performance on all dimensions of the composite innovation index: from research and innovation inputs, through business innovation activities up to innovation outputs and economic effects, reflecting a balanced national research and innovation system (European Commission, 2015).

At the other end of the scale, in the group of ‘modest innovators’, with performance well below the EU average, are three eastern European Member States: Bulgaria, Latvia and Romania. In between are two large groups of 13 ‘moderate innovators’ with performance below the EU average and 8 ‘innovation followers’ with performance above or close to the EU average (see Figure 15).

The fastest growth in innovation performance since 2007 has been observed among innovation followers, moderate and modest innovators. In particular, Latvia, Bulgaria and Malta have shown the most improvement over the past few years. However, innovation performance has not improved in a few Member States. Innovation leader Finland, innovation follower Luxembourg and moderate innovator Greece just managed to maintain positive annual average growth rates, while average annual growth rates in Cyprus, Spain and Romania were negative.

Most progress in innovation performance made by EU countries between 2007 and 2014 lies in an increase in the openness and attractiveness of the EU research system, the improvement in human resources and the growth in intellectual assets. However, according to the Innovation Union Scoreboard 2015 the growth of public R&D expenditure over the past few years has been offset by a continuous fall in venture capital investment and a declining share of SMEs that introduced product or process innovations, or marketing or organisational innovations (see also indicators on R&D expenditure, venture capital investment and patent applications).

Northern European Member States are leaders in eco-innovation

Figure 16: Eco-innovation index, by country, 2013
(Index EU 28=100)
Source: European Commission, Eco-Innovation Observatory, online data code (t2020_rt20)

Eco-innovation, like all innovations, is bringing a new product (good or service) to the market or implementing a new solution in the production or organisational processes of a compa-ny . Eco-innovation reduces the use of natural resources and decreases the release of harmful substances across the whole lifecycle, bringing economic, social and environmental benefits. Environmental benefits include improved resource productivity, in particular better material and energy efficiency, lower GHG emissions and reduced waste generation, which is both beneficial for companies and end users. Measuring eco-innovation performance helps with assessing whether the EU and its Member States are moving towards smart and sustainable growth in Europe, as requested by the Europe 2020 strategy.

The Eco-Innovation Scoreboard (Eco-IS) assesses and illustrates eco-innovation performance across the 28 Member States. The Eco-IS shows how well individual countries perform in different dimensions of eco-innovation compared with the EU average. It is based on 16 indicators grouped in to five thematic areas: eco-innovation inputs, eco-innovation activities, eco-innovation outputs, resource efficiency and socio-economic outcomes. In the index, Member States are ranked in relation to the EU average of 100.

In 2013, the overall eco-innovation performance of EU countries ranged from around 40 in Bulgaria, Poland and Cyprus to almost 130 or more in Denmark, Germany, Finland and Sweden. The latter four countries are also the innovation leaders in the Union innovation scoreboard (see Figure 16). The majority of EU-15 countries can be found at the top, particularly Scandinavian countries, but also Germany, the United Kingdom, Spain, Luxembourg, Austria and Belgium. These all persistently show an index value above the EU average over the four years analysed by the index (2010 to 2013). The less well performing countries are in Eastern and Southern Europe. Another set of four countries made up of France, Italy, Ireland and the Netherlands, has values rather close to or exceeding the EU average in 2013 and in the preceding years.

The ranking of a few Member States has improved considerably since 2010: this is namely the case of Lithuania, which gained eight places, and Estonia and Luxembourg, gaining six places each. However, the ranking was less favourable in some other countries: Cyprus and Bulgaria both lost seven places and the Netherlands six places .

How are EU sectors performing with regard to new patent applications?

Figure 17: Patent applications to the European Patent Office (EPO) by priority year by international patent classification (IPC) sections and classes, EU-28, 2002–2011
(Number)
Source: Eurostat online data code (pat_ep_nipc)

The more cutting-edge knowledge is produced, the more likely it will spill over into new products and private R&D activities. In this regard, patents provide a valuable measure of the exploitation of research results and of the inventiveness of countries, regions and firms. Patent development has a strategic role in supporting Europe 2020. Bringing innovative ideas on to the market through patenting helps improve EU’s competitiveness and productivity, which underlie economic growth and employment, and brings long-term benefits to the economy at large through the wide diffusion of knowledge.

Between 2002 and 2007, total patent applications in the EU increased almost continuously until the global economic and financial crisis started to emerge in 2008. After peaking in 2007, EU patent applications fell by 4 % between 2007 and 2010.

The trend with total patent filings at EU level is to a large extent reflected by development in the individual sectors as outlined in Figure 17. Of the eight main patent subsectors, the smallest — the textile and papers sector — has been hit the hardest, with patent applications dropping by almost 20 % between 2007 and 2010. A similar trend can be observed in the chemistry and metallurgy sector (– 8 %). The human necessities, performing operations, transporting and fixed constructions and physics and electricity sectors have been affected to a lesser degree (varying between – 7 % and – 1 %). In 2011, patent application stabilised or started increasing gradually in almost all sectors apart from performing operations and transporting, chemistry and metallurgy, and fixed constructions, where they decreased slightly. However, in the next year all sectors experienced a strong reduction varying between 15 % in physics and 24 % in chemistry and metallurgy. This was also reflected in the 19 % drop in total patent filings in that time period.

Climate change patents have been equally hit by the crisis

Figure 18: Patent applications of technologies or applications for mitigation or adaptation against climate change, EU-28, 2002-11
(Number)
Source: Eurostat online data code (pat_ep_nrg)

The EU focuses its investment strategies towards innovation-oriented sectors that help address some of society’s most pressing challenges. To this ends, the EU plays a leading role in developing climate change mitigation and adaptation technologies, accounting for 40 % of all world patent applications in this field (see Innovation Union Competitiveness Report 2011).

Figure 18 shows EU patent applications in the field of climate change mitigation and adaptation. Similar to total patent applications, this sector did not escape the financial and economic crisis. EU’s patent sector for climate change mitigation and adaptation grew rapidly between 2002 and 2009, at an annual average rate of 17.7 %. In the next two years, patent applications continued to rise but much more slowly (5.4 %). This slowdown might be due to firms reducing R&D expenditure, which would indirectly affect patentable inventions, organisations postponing some applications because of cost-saving or risk aversion , or it might be a result of a saturation effect.

The ‘capture, storage, sequestration or disposal of greenhouse gases’ and the 'production of fuel of non-fossil origin’ sectors, which account for only 4 % and 9 % of total climate change mitigation and adaptation patents, respectively, experienced a reduction. Patent applications in both sectors dropped by nearly 9 % between 2008 and 2010 before rising again in 2011. The ‘electrical power generation, transmission or distribution’ sector was also affected, with the number of patent filings falling by 8 % in 2008 before rising sharply in the following three years.

High-tech patent applications to the European Patent Office (EPO) by priority year

Figure 19: High-tech patent applications to the European Patent Office (EPO) by priority year, EU-28, 2002–2011
(Number)
Source: Eurostat online data code (pat_ep_ntec)

Increased specialisation of countries in the production of medium and high-tech products is an important characteristic of a knowledge-based economy, which reflects the economic effect of innovation. As a key driver for economic growth, productivity and welfare, and generally a source of high value added and well-paid jobs, high-tech production is important for many of the priority areas of Europe 2020 strategy.

As shown on Figure 19, within the high-tech sector, communication technologies hold the highest share of patent filings (38 % in 2011), followed by computer and automated business equipment (31 %). This is not surprising as ICT is a key enabler for the development of most other economic sectors. The number of high-tech patents in the EU has been falling almost continuously, by an annual average rate of 2 %, since 2002. The number of patents in the laser sub-sector, which is the smallest sub-sector within the high-tech sector of the international patent classification (IPC), fell the most, by almost 50 % between 2002 and 2011. Among all high-tech patents in the IPC, only the number of patents for aviation increased during this period, more than doubling in number over the course of one decade.

High-tech exports have recovered on the international market

Figure 20: High-tech trade by group of products in million euro export, EU-28, 2007–14
(EUR million)
Source: Eurostat online data code (htec_trd_group4)

Beyond turning research results into tangible applications, innovative businesses compete globally to sell their high-tech products on the world market. By bringing good ideas to the market, businesses contribute to innovation-related trade, for example, in high-tech goods, for the benefit of an economy’s balance of trade. Since high-tech trade is associated with high value added for the economy and knowledge-intensive and well paid jobs, it contributes to Europe 2020’s priorities for smart and inclusive growth. Even though only 13 % of the EU’s small and medium enterprises (SMEs) were active in markets outside the EU in 2009, according to a European Commission Staff working document these exporters showed greater employment growth and innovation than non-exporters.

During 2008 and 2009 total EU high-tech exports to outside the EU fell. However, after the sharp drop in 2009 high-tech exports quickly recovered and by 2014 had increased continuously by more than 42.5 %. Similar trends can be observed at sector level. The economic crises led to reductions in all high-export sectors between 2008 and 2009, with the exception of pharmacy which grew by 19 %. Since the recovery from the economic crisis, the aerospace and pharmacy sectors have been the main drivers behind the EU’s high-tech exports, growing by more than 60 % between 2009 and 2014 (see Figure 20).

Outlook towards 2020

The Europe 2020 strategy tries to overcome the economic crisis and its impacts by addressing the shortcomings of the EU’s growth model. It also attempts to create the conditions for a „smarter“growth through more effective investments in education, research and innovation. However, R&D intensity is expected to remain below the 3 % objective the EU has set itself for 2020. In 2014 it was at 2.03 % and had shown only limited progress over time. According to the latest projections, and if current reforms and financial efforts continue, investment in R&D is forecast to rise to 2.2 % by 2020 (see Taking stock of the Europe 2020 strategy for smart, sustainable and inclusive growth). Progressing more rapidly towards the 3 % target would require a faster structural shift to more knowledge-based economic activities. This share could reach 2.6 % if Member States meet their national targets. However, progress towards these is uneven, with targets ranging from 0.5 % to 4.0 % of GDP. In 2014, Denmark and the Czech Republic had already met their respective national targets, while Cyprus and Germany came very close, with a gap of 0.05 and 0.16 percentage points, respectively, to be closed by 2020.

Besides context-specific factors that influence R&D investment, the distance to the EU target can be ascribed to various challenges that have not been fully overcome by the actions and instruments put in place. These instruments aim to foster private investment in R&D and to maintain and promote public funding of R&D despite the crisis.

The ‘Innovation Union’ flagship initiative is one of the most prominent EU policy instruments. It places renewed emphasis on public sector intervention to stimulate the private sector and remove bottlenecks to enable EU’s scientific expertise to be converted into marketable goods and services. More specifically the flagship initiative puts emphasis on the challenges facing our society, such as climate change. Delivery of the actions set out in ‘Innovation Union’ is on track, but with various levels of implementation. In particular, the initiative has not succeeded in closing the innovation performance gaps between EU countries. However, it has reduced the gap between the EU and its main competitors (see Taking stock of the Europe 2020 strategy for smart, sustainable and inclusive growth — Annexes 1 to 3).

Between 2014 and 2020, ‘Innovation Union’ will be implemented through financial support provided by Horizon 2020, EU’s current framework programme for research and innovation. With EUR 74.8 billion of funding available for the next seven years, Horizon 2020 will namely finance the further development of ERA which is at the heart of Europe 2020 and ‘Innovation Union’. The ERA has been designed to create attractive conditions for carrying out research and investing in R&D-intensive sectors. Another policy instrument is the ‘Digital agenda for Europe’ flagship initiative which aims to unleash the digital potential and diffuse the digital culture widely across the EU through a set of more than 100 actions. Ninety per cent of these had been completed or were on track in January 2014. The flagship initiative has increased political focus on the digital economy while also strengthening the use of the internet, development of e-commerce, availability of e-government services and accessibility of basic broadband internet connections in most of the EU (European Commission, 2014). Complementing these initatives, in 2015 the European Commission adopted an ambitious strategy to complete the Digital Single Market by addressing existing regulatory and market barriers (see European Commission, 2015). The Digital Single Market is defined as a market “in which the free movement of goods, persons, services and capital is ensured and where individuals and businesses can seamlessly access and exerciseonline activities under conditions of fair competition, and a high level of consumer and personal data protection, irrespective of their nationality or place of residence. The Digital Single Market Strategy is built on three pillars: better access for consumers and businesses to online goods and services across the EU; creating the right conditions for digital networks and services to flourish and maximising the growth potential of our European Digital Economy. Some of the main objectives envisioned by the strategy are to conclude negotiations on common EU data protection rules, give more ambition to the ongoing reform of telecoms rules, modify copyright rules to reflect new technologies, and to make them simpler and clearer, simplify consumer rules for online purchases and make it easier for innovators to start their own business. It is expected that a fully functional Digital Single Market would promote innovation, contribute €415 billion per year to the EU economy and create many new jobs (European Commission, 2015).

Data sources and availability

Indicators presented in the article:

• Gross domestic expenditure on R&D (t2020_20)
• Gross domestic expenditure on R&D by sectors of performance (rd_e_gerdtot)
• Total R&D personnel by sectors of performance, occupation and sex (rd_p_persocc)
• Gross domestic expenditure on R&D by NUTS 2 regions (rd_e_gerdreg)
• Tertiary graduates in science and technology (tps00188 and educ_uoe_grad04)
• Employment in knowledge-intensive activities by sex (htec_kia_emp2)
• R&D personnel by sectors of performance (rd_p_perslf)
• Households with broadband access (tin00089)
• Enterprises with broadband access (tin00090)
• Individuals with at least basic overall digital skills and digital communication skills (isoc_sk_dskl_i)
• Enterprises by types of innovation (inn_cis8_type)
• Innovative enterprises engaged in any type of co-operation (inn_cis8_coop)
• Innovation performance (Innovation Union Scoreboard 2015)
• Eco-innovation index (t2020_rt200)
• Patent applications to the EPO by priority year by international patent classification (IPC) sections and classes (pat_ep_nipc)
• Patent applications of technologies or applications for mitigation or adaptation against climate change (pat_ep_nrg)
• High-tech patent applications to the EPO by priority year (pat_ep_ntec)
• High-tech trade by group of products in million euro (htec_trd_group4)

Context

R&D and innovation contribute to a well-functioning knowledge-based economy. Most importantly, they are central to providing the scientific and technical solutions needed to meet global societal challenges such as climate change and clean energy, security, and active and healthy ageing. For instance, technological advances in materials science and digitalisation are driving rapid progress in renewable energy and energy efficiency as well as other sectors important for sustainable development and climate change mitigation such as transport, construction, manufacturing, agriculture and consumer goods . However, development of new technologies alone will not be enough to solve many of the ‚grand’ societal challenges. Fundamental transformations in businesses and manufacturing processes, provision of services, the way society organises itself and other non-technological innovations will be equally important.

The challenges facing society also pose threats to the wellbeing of the population and can have dire social, economic and environmental implications inside and outside the EU. Addressing these challenges requires substantial resources, but also offers new market opportunities that could be exploited through innovation. As emphasised in a European Commission’s Communication, investment in research and innovation can help mobilise these resources. A number of important EU policy strategies and initiatives address such win-win situations. For instance, EU Action Plan for the Circular Economy, included in the Circular Economy package, proposes actions that will contribute to ‚closing the loop’ of product life cycles through greater recycling and re-use, and bring benefits for both the environment and the economy. Similarly, the ‘Roadmap to a Resource Efficient Europe’ supports the shift towards a resource-efficient, low-carbon economy, while bringing new economic opportunities, sources of growth and jobs and increased competitiveness through improved efficiency. Indicators such as the eco-innovation index and patent applications for climate change adaptation and mitigation, analysed in this article, allow the impact of R&D investment on innovative efforts towards resolving important societal challenges to be monitored.

The importance of R&D and innovation to fulfilling the ambitions of the Europe 2020 strategy is evident in the close interlinkages between them and the strategy’s other objectives (see Research and innovation as sources of renewed growth). The Europe 2020’s R&D target has a mutually beneficial relationship with the strategy’s tertiary educational attainment and employment targets (see articles on 'Employment' and 'Education'). Public investment in R&D generates the knowledge base and talent that higher education and innovative companies need, thus feeding into the development of academic knowledge and innovative products. Greater public investment in R&D also leverages private investment in research and innovation, providing new jobs in business and academia and ultimately increasing demand for scientists and researchers on the labour market. Moreover, increased investment in education and skills development, as well as a rise in the output of tertiary education graduates, improves the skills base of the EU labour force and, therefore, its employability. Mutual benefits also exist between the strategy’s targets on R&D and on climate change and energy when taking into account the future potential of innovative new products and processes to tackle these societal challenges (see the article on 'Climate change and energy'). For instance, transition to a green and low-carbon economy and climate change mitigation will require significant innovation, from small incremental changes to major technological breakthroughs.

See also

• Europe 2020 headline indicators

Further Eurostat information

Publications

• Smarter, greener, more inclusive? - Indicators to support the Europe 2020 strategy

Main tables

• Europe 2020 indicators

Dedicated section

• Europe 2020 indicators

Methodology / Metadata

• Towards robust quality management for European Statistics - Communication from the Commission COM(2011) 211 final

Other information

• Regulation (EC) No 223/2009 of 11 March 2009 on European statistics

External links

• European Commission website Europe 2020