EU companies to boost innovation investments

The latest European Commission survey of EU R&D Investment Business Trends published on 10 August shows that the top R&D investing companies based in Europe expect their global research and development (R&D) investments to grow by 5% annually from 2011 to 2013.

The results published in the sixth EU Survey on R&D Investment Business Trends is more than double last year's expectations, and represents a significant upturn from the 2.6% R&D cuts in investment implemented by these companies during 2009. The survey also revealed that an average of 27% of the annual sales of the companies analysed in the report come from innovative products introduced in the past three years. A clear indication of the value of innovation to commercial success and to job creation.

"The survey provides welcome positive economic news and grounds for cautious medium-term optimism, given that business R&D is a key driver of sustainable growth and jobs. But if we are to achieve our Europe 2020 targets, including getting R&D investment in the EU up to 3% of GDP, we will need these forecast investments for 2011-13 to be delivered in practice,” commented Máire Geoghegan-Quinn, Commissioner for Research, Innovation and Science. “We will also need further increases in the rate of growth of private R&D investment in subsequent years, both by the big companies covered in this survey and by SMEs. And we will need to deliver an Innovation Union in Europe so that investing in R&D here is more attractive than doing so elsewhere."

Investment in EU and globally
Companies surveyed expect their R&D investment inside the EU to grow 3% a year over the next three years. But they expect the growth in their R&D investment in other world regions to be higher: in particular China (25%) and Japan (17%). The surveyed companies carry out a quarter of their research outside the EU, in particular in the US and Canada.

This trend shows that EU-based companies want to benefit from the growth in emerging economies while still retaining a strong overall focus on the EU.

In response to questions on the key factors that have a positive effect on innovation, the main factors identified were: the availability of qualified personnel and of public support such as grants and fiscal incentives. Collaboration with other entities, such as higher education institutions, was also seen as important.

Factors perceived as negative for all sectors were enforcement costs of Intellectual Property Rights (IPR) and the time needed to obtain IPR protection. This again highlights the critical importance of fostering an innovation-friendly IPR regime in Europe -in particular the proposed unitary EU patent.

Survey background:
The EU Survey on R&D Investment Business Trends was carried out by the Commission’s Joint Research Centre’s Institute for Prospective Technology Studies based in Sevilla, Spain. The survey results are based on 205 responses of mainly larger companies from the 1000 EU-based companies in the 2010 EU Industrial R&D Investment Scoreboard. Taken together, these 205 companies are responsible for R&D investment worth almost €40 billion, constituting around 30% of the total R&D investment by the 1000 EU Scoreboard companies, which is a significant share of European business investment in R&D.