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Commission lays out plans for reaching three per cent R&D spending target

Following agreement at the Barcelona Council to raise research spending to three per cent of the EU's average GDP (gross domestic product), the European Commission has laid out plans for achieving this objective. Proposals from the Commission call for a supply of high quality...

Following agreement at the Barcelona Council to raise research spending to three per cent of the EU's average GDP (gross domestic product), the European Commission has laid out plans for achieving this objective. Proposals from the Commission call for a supply of high quality human resources, a strong public research base with stronger links to industry, a dynamic entrepreneurship culture and appropriate protection for intellectual property rights. A competitive environment with research and innovation friendly regulations and competition rules and supportive financial markets, which include macro-economic stability and favourable fiscal conditions are also necessary if the EU is to meet its objective, claims the proposal. 'Higher investment in science and technology is key for Europe's future,' said EU Research Commissioner Philippe Busquin announcing the communication. 'In the current economic downturn, we need even more R&D [research and development] investment today to seed innovations that will bring about growth and employment tomorrow.' Mr Busquin also emphasised that action is now a matter of urgency. 'In the USA, 288 billion euro was spent on research and technological development in 2000, but only 164 billion euro in the EU. The gap is widening. We need a general discussion in Europe on how best to make government research budgets give genuine leverage to increase private investment,' said the Commissioner. The communication puts significant emphasis on the role of the private sector. 'Although many enterprises recognise the increased importance of investing in R&D, they will do so only to the extent that they can exploit results effectively and expect sufficient returns to balance the risk inherent in such investment,' states the paper. The Commission is hoping that by addressing relevant policy areas, investment will become more attractive for enterprises. The paper highlights that there is also a role for the public sector to play in increasing R&D expenditure in the EU. The communication calls for 'a more effective and focused use of public financial incentives to private R&D and technology based innovation within the context of state aid rules and of the stability and growth pact.' The communication goes on to say that 'efforts to enhance public support for R&D must to a large extent come through restructuring of public expenditure.' A mix of direct support measures, fiscal incentives, guarantee schemes and public support for risk capital is now called for, as no single instrument is able to provide the full range of incentives, the communication claims. While it is well documented that the USA and Japan invest significantly more than the EU average in R&D, some EU Member States have already reached the three per cent target. R&D expenditure is already above three per cent of GDP in Sweden and Finland and above 2.5 per cent in Germany. Spending remains below one per cent of GDP however in Greece, Portugal, Spain and in all candidate countries except the Czech Republic and Slovenia.