Top 500 European companies' RTD strategies

The RTD strategies of the top 500 European companies are examined in a recently published report, of a study conducted on behalf of DG XII of the European Commission. The objectives of the study were to examine the RTD strategy process in these companies and to improve underst...

The RTD strategies of the top 500 European companies are examined in a recently published report, of a study conducted on behalf of DG XII of the European Commission. The objectives of the study were to examine the RTD strategy process in these companies and to improve understanding of why, and how, they participate in the European Community's RTD Framework Programmes and EUREKA.

The survey found that the top 500 companies spend, on average, 1% of their total sales on research activities and 3% on development activities. The largest part of RTD expenditures is dedicated to product and process development, with due consideration for the needs of the market. RTD activities have come to focus on cost reduction and innovation, given a general trend for cost reduction.

According to the survey, the effectiveness of R&D activities is rarely measured, with the main defining factor in the RTD strategy the budget available. However, as budget constraints are tightened, companies are increasingly turning to partnership to reach their research objectives. The study found that 22% of total research expenditures are sub-contracted or performed in cooperation with public or private partners.

Participation in both the Framework Programmes and EUREKA is only the preserve of the largest of the top 500 companies, with smaller companies more likely to participate in only one of the schemes. However, according to the survey, only 4% of the total R&D budgets comes from Community or EUREKA funding. Therefore, the possibilities of funding from these two sources are rarely taken into account in developing R&D strategies. The study did establish that both the Framework Programme and EUREKA have greater influence in sectors where European companies are not already world-leaders.

The Framework Programme is often used by these companies as a means of sharing risks and financing long-term prospective research. Obstacles to participation include the expense of the bidding process, the intellectual property rights (IPR) restrictions, and the partnership requirements.