Lisbon isn't working: R&D investment stagnates

The latest Eurostat data on R&D investment in the EU published last week show that in 2005 the EU27 spent just over Euros 200 billion. R&D intensity, that is expenditure as a percentage of GDP, was flat at 1.84 per cent, the same as in 2004.

And R&D intensity remained significantly lower in the EU27 than in other major economies. It was 2.68 percent of GDP in the US and 3.18 percent in Japan, and has reached 1.34 percent in China.

In real terms R&D expenditure in the EU27 rose by 1.5 percent in real terms on average per year between 2001 and 2005, compared to 1.7 percent in the US and 2.0 percent in Japan.

In 2004 the private sector financed 55 percent of total EU27 R&D expenditure, while the corresponding share was 64 percent in the US, 75 percent in Japan and 66 percent in China.

Overall R&D intensity varied from 0.4 percent of GDP in Cyprus and Romania to 3.9 percent in Sweden, followed by Finland at 3.48 percent,  Germany, 2.51 percent, Denmark, 2.44 percent, Austria 2.36 percent and France (2.13 per.

Annual average growth rates of R&D expenditure in real terms over the period 2001 to 2005 ranged from +18 percent in Latvia, +17 percent in Estonia, +15 percent in Cyprus and +11 percent in Lithuania to -2 percent in Belgium and Slovenia and -1 percent in Slovakia.

The private sector finances the highest share of EU27 expenditure on R&D at 55 percent, followed by the government at 35 percent and inward investment at 8 percent. Among Member States, Luxembourg at 80 percent recorded the largest share of R&D expenditure financed by the business sector in 2004, followed by Finland (69%), Germany (67%), Sweden (65%), Belgium and Denmark (both 60%). Three Member States registered shares for the business sector of 20% or less: Malta and Cyprus (both 19%) and Lithuania (20%).

Research and Development expenditure

	R&D intensity R&D expenditure as % of GDP			R&D expenditure		R&D expenditure financed by business sector, as % of total
	2001	2004	2005	2005 (mio euro)	Annual average growth rate in real terms (%) 2001-2005	2004
EU27	1.88	1.84	1.84	201 020	1.5	54.9
EU25	1.88	1.85	1.85	200 633	1.5	54.9
EU15	1.94	1.91	1.91	196 076	1.4	55.2
Belgium	2.08	1.85p	1.82p	5 428p	-1.7	60.3**
Bulgaria	0.47	0.51	0.50	106	6.8	28.2
Czech Republic	1.20	1.26	1.42	1 417	8.3	52.8
Denmark	2.39	2.48p	2.44p	5 097p	2.1	59.9**
Germany	2.46	2.50	2.51p	56 356p	1.0	66.8
Estonia	0.71	0.88	0.94p	104p	16.5	36.5
Ireland	1.10p	1.21p	1.25p	2 020p	8.5	57.2p
Greece	0.64	0.61p	0.61p	1 112p	3.2	28.2**
Spain	0.91	1.06	1.12p	10 100p	8.4	48.0
France	2.20	2.14	2.13p	36 396p	0.6	51.7
Italy	1.09	1.10	:	15 253*	0.8	:
Cyprus	0.25	0.37	0.40p	54p	15.2	18.9
Latvia	0.41	0.42	0.57	73	17.6	46.3
Lithuania	0.67	0.76	0.76	157	11.4	19.9
Luxembourg	1.65****	1.66	1.56p	458p	1.8	80.4
Hungary	0.92	0.88	0.94	838	5.0	37.1
Malta	:	0.63	0.61p	27p	:	18.6***
Netherlands	1.80	1.78p	:	8 723*p	0.4	51.1**
Austria	2.04p	2.23	2.36p	5 784p	5.4	47.2
Poland	0.62	0.56	0.57	1 386	1.1	26.9
Portugal	0.80	0.77p	0.81p	1 189p	0.4	31.7**
Romania	0.39	0.39	:	235*	:	44.0
Slovenia	1.55	1.45	1.22	338	-2.3	58.5
Slovakia	0.63	0.51	0.51	194	-0.6	38.3
Finland	3.30	3.46	3.48	5 474	3.8	69.3
Sweden	4.25	:	3.86	11 109	0.2	65.0**
United Kingdom	1.83	1.73	:	29 956*	0.7	44.2
Croatia	1.11***	1.22	:	345*	9.5	43.0
Turkey	0.72	:	:	1 280***	-1.0	41.3***
Iceland	2.98	2.83	:	297*	1.5	43.9**
Norway	1.60	1.62	1.51p	3 599p	0.5	49.2**
China	0.95	1.23	1.34	24 042	19.7	65.7
Japan	3.13	3.18	:	117 483*	2.0	74.8
United States	2.76	2.68p	:	251 254p*	1.7	63.7p

Key to table

: Data not available
p: estimated or provisional data
EU27, EU25 and EU15: Eurostat estimate
Exceptions to the reference year: * 2004, ** 2003, *** 2002, ****2000.
% annual average growth is for 2001-2005 except for Luxembourg: 2000-2005; Turkey: 2001-2002; Italy, Netherlands, United Kingdom, Iceland, Japan and USA: 2001-2004; Croatia: 2002-2004.
Hungary: Excludes defence
USA: Excludes most or all capital expenditure