EU business R&D spending still on the up
European companies are increasing their research and development (R&D) investments faster than their counterparts in the US and Japan, according to the EU's latest 'Industrial R&D Investment Scoreboard', which has just been published. Released annually, the scoreboard draws on R&D investment data from the 1,000 EU companies that invest the most in R&D and the 1,000 leading R&D spenders from outside the EU. The latest scoreboard reveals that during the 2007-2008 financial year, all 2,000 companies increased their R&D investments by 9%, down from a 10% increase the previous year. EU companies have been steadily increasing their R&D investments for five years in a row now: in 2004-2005, EU companies increased their investments in R&D by less than 1% but in 2007-2008 EU investment shot up by 8.8%. For the first time, the rise in R&D investments by EU companies was higher than the 8.6% increase in investments by American businesses. Meanwhile, the growth in investments by EU companies outstripped that of Japanese industry for the third year running. 'We are pleased that R&D investment growth in EU companies has increased against the background of a slight fall in the growth rate worldwide,' commented EU Science and Research Commissioner Janez Potocnik. The top three companies in the ranking are all American. Microsoft, which spent EUR 5.58 billion on research last year, topped the list, knocking Pfizer (EUR 5.53 billion) into third place behind General Motors (EUR 5.54 billion). The highest-ranking EU company is Finnish mobile phone company Nokia, which claimed fifth place with an R&D investment of EUR 5.28 billion. Two German vehicle manufacturers, Volkswagen and Daimler, were the only other EU-based companies in the top ten. In total, 18 EU companies made it into the top 50, compared to 20 US companies and 9 Japanese companies. The pharmaceuticals and biotechnology sector is still the top R&D investor worldwide, accounting for 19% of all R&D investments by the companies on the scoreboard. The EU and Switzerland are particularly well represented in this sector, with companies such as Roche, Novartis and AstraZeneca increasing their R&D investments by over 20%. Another strong performer was the energy sector, where some leading players have dramatically increased their R&D spending over recent years. Within this sector, companies working on alternative energies such as wind and solar power show the strongest growth rates. Nevertheless, Commissioner Potocnik warns against complacency. 'Private sector R&D in Europe remains at 1% of GDP, amidst signs that EU companies are making an increasing share of their R&D investments outside Europe,' he noted. 'Therefore, we must continue our efforts to make Europe a more attractive place for business R&D, notably by creating a truly European Research Area, in order to reach the Lisbon objectives.'