The statistics show that private sector R&D business investment is 2.5 times greater in the US, at €83.8 billion in purchasing power parity, than in the EU at €34.1 billion. A full 50 per cent of patents submitted by US-based inventors are in ICT technologies compared to 20 per cent in Europe. However, lower R&D investment in the EU compared to the US does not necessarily mean that individual EU ICT companies invest relatively less in R&D than their international competitors. The disparity is largely due to the smaller size and slower growth rate of European ICT companies.
The ongoing investment gap will be tackled anew by the forthcoming European Digital Agenda, one of seven flagship initiatives of the Europe 2020 strategy for smart, sustainable and inclusive growth.
R&D in ICT across Member States
In 2007, Germany accounted for 27 per cent of employment in the ICT manufacturing sub-sectors, while the UK remained the leader in ICT services, taking up 19 per cent of jobs. These two countries, together with France, contributed to more than half of business R&D expenditure in ICT, and generated three out of four of all European patents in ICT technologies, with Germany in the lead, with almost 45 per cent.
Finland, Germany, the Netherlands and Sweden are the only four Member States whose number of ICT patent applications is similar to, or above, the US ratio of 110 patents for every million people in 2006. Finland and Sweden invest the largest amount of business R&D expenditure in ICT in relation to their GDP, above the US level.
When it comes to public funding, EU governments fund a smaller share of ICT R&D in relation to total public funding for R&D compared to the US. In 2007, 6 per cent of total public funding for R&D in the EU, or €5.3 billion, went to the ICT sector, while it was close to 9 per cent or €10.4 billion in the US. Finland, Sweden and Spain were the countries with the highest levels of ICT public funding in relation to their GDP, close to the US level.
Despite a strong increase in R&D investments made by the ICT sector in the new EU Member States, this expenditure is still low in relation to their GDP. However, spectacular increases in ICT manufacturing employment have occurred in Hungary, up 46 per cent, and the Czech Republic, up 44 per cent.
The report was commissioned by the European Commission’s Directorate General for Information Society and Media and carried out by the Institute for Prospective Technological Studies, one of the seven scientific institutes of the European Commission's Joint Research Centre. The work focused on three complementary perspectives: national statistics covering both private and public R&D expenditure, company data and technology-based indicators. It relies on the latest available official statistics delivered by the Member States, Eurostat and the OECD.
In 2009, the European Commission committed to increase annual funding for ICT research from €1.1 billion in 2010 to €1.7 billion in 2013. It called on Member States to match this budget increase at national level with diverted and new sources of financing. including pre-commercial procurements of research results and cohesion policy funds.
The report is available at: http://ipts.jrc.ec.europa.eu/publications/pub.cfm?id=3239
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