The recent survey asks European companies how they see their
investment in research and development to progress over the
next three years, and respondents indicated that they are planning
a much greater increase of R&D investment than in the past.
The report shows that, on average, companies plan to increase
their investment in research 5% per year over the next three
years. That is in stark contrast to present investment strategies.
Current figures contained in the 2005 Scoreboard show that R&D
investment increased just 0.7% in 2003-2004.
The survey is the first of its kind giving researchers and policy
makers reliable figures of R&D prospects across the EU and
across different industry sectors.
The survey, carried out by Seville based JRC think tank The
Institute for Prospective Technological Studies as part of the
Industrial Research & Innovation Action polled 449 companies
from all across Europe operating in ten different industries.
The Commission received responses from some of the most important
European industry sectors including: automobiles, chemicals,
electronics, engineering machinery, food producers, health,
IT hardware, pharmaceuticals, biotechnology, among others.
The companies who responded to the survey represent nearly €30
billion worth of investment, a significant portion of privately
funded research found in Europe.
“If we are to reach our objective of investing 3% of GDP
in research and development, we need increased investment by
the private sector,” said Janez Potočnik, European
Commissioner for Science and Research, in a statement. “For
this reason the results of this survey are encouraging. We need
to maintain and reinforce our efforts at European and national
level to make Europe an attractive place for companies to carry
out their research. The Commission will be coming forward with
some more ideas in this area in autumn 2006.”
One significant difference between FP7 and previous programmes
is to encourage greater participation by the private sector
in investing in European R&D.
The main reasons for increasing R&D investment include changes
in market demand for new products and services, changes in technological
opportunities, and changes in company turnover or profit.
When deciding where geographically to place their investment
money, industry representatives indicated that access to markets
proved to be the deciding factor. Other reasons influencing
decisions on where to invest were high availability of researchers,
access to specialised R&D knowledge and results, macroeconomic
and political stability, and R&D cooperation opportunities.
Despite much ink being spilled during the recent EU enlargement
phase about the outsourcing of jobs to the east, labour cost
for researchers proved to be of lesser importance. In terms
of investing in research personnel, companies seem to understand
that quality has a price.
The report also shows that companies prefer to keep investment
in their home countries. Germany is the most popular hub for
European R&D, followed by the United Kingdom and France.
When research is outsourced beyond EU borders, the US is by
far most popular, with China a distant second and India coming
Clearly some sectors are expecting to invest more than others.
According to the report, of the 449 companies responding to
the survey, those from the pharmaceuticals/biotechnology and
chemicals sectors represent 60% of the total investment, or
around €18 billion.
If such rosy figures are to be believed, for the first time
in several years European R&D is expected to do at least
as well as that in the United States. The report warns against
reading too much into the data, however, saying it is possible
that only those companies planning large investment may have
responded to the survey, skewing results.
The engineering and machinery sector stands to see the largest
percentage increase over current investment. The report shows
that over the next three years investment there could be augmented
by up to 12% p.a.
The EU Survey on R&D Investment Business Trends was carried
out by the European Commission as part of the Commission's Industrial
Research Investment Monitoring (IRIM) project.