Reports show EU on right track, but R&D investment stagnating
The results of the recently published 'European Innovation Scoreboard 2008' and 'Science, Technology and Competitiveness key figures report 2008/2009' indicate substantial improvements in certain areas but show that R&D (research and development) intensity in the EU27 is stagnating. Both reports were presented in Brussels this week by European Commission Vice President Günter Verheugen and Commissioner for Science and Research Janez Potocnik. Public and private investment in R&D and innovation are considered to be essential for helping economies to stabilise and get out of crisis periods. Yet the intensity of research investment (the amount invested in R&D compared to GDP) has not increased in recent years, and remains at around 1.84%. Commissioner Potocnik emphasised that European businesses in particular must step up to the plate. 'In a time of crisis, it is not the moment to take a break in research investments and in innovation' he said. 'They are vital if Europe wants to emerge stronger from the economic crisis [...] The Commission's initiatives to improve the EU's research efficiency, to stimulate innovation and to develop high tech markets are putting the EU on the right track.' Commissioner Verheugen supported this by saying, 'A crisis is a terrible thing to waste. It is important that we harness all possibilities and make a very strong recommendation to European companies, not to cut investment, not to cut expenditure on research, development and innovation, and not to send off highly qualified employees to unemployment because we need them all.' The competitiveness report examines data from the period 2000 to 2006, while the innovation scoreboard includes data from 2007; neither report reflects the impact of the current economic crisis. However, both show clearly that while European universities are producing more research graduates, many of them might be lost to competing regions due to lagging job opportunities. Foreign investment in the EU27 was also shown to have increased substantially, with Europe claiming 62% of US foreign R&D investment. All EU Member States increased their R&D expenditure between 2000 and 2006, indicating their commitment to the Lisbon strategy of investing 3% of GDP in R&D. Portugal and Greece in particular made notable efforts. However, many continue to perform well below average. In Italy, Spain and Lithuania, Commissioner Verheugen said, 'it is essential that a concentrated effort be made to improve the situation'. In terms of competitiveness, Finland, Sweden and Switzerland performed exceptionally well, but R&D intensity did not increase in the UK, France or Italy and increased only slightly in Germany. This is important because these countries have the highest GDP in the EU27. While the difference in investment has been closing between European Member States, the overall stagnation is having an impact on Europe's global competitiveness, especially in the face of China's rapid growth. Notably, 12 Member States showed higher R&D intensity than China while 15 spent far less than China on research. R&D intensity in Japan, South Korea and China has been on the rise, and while intensity in the US has decreased it has done so from a position of considerable strength. According to a Commission statement, the EU is still far from reaching its Lisbon target. 'A continued low level of business R&D investment, linked to an EU industrial structure with a smaller high-tech sector than in the US, hampers the EU's performance [...] The EU must change its industrial structure, gear up on innovation and ensure more and better use of R&D.' Creating conditions favourable to fast-growing high-tech SMEs is necessary, along with a more innovation-friendly European market and better access to 'EU-wide' patenting. The innovation scoreboard shows Denmark, Germany Finland, Sweden and the UK to be innovation leaders, 'with innovation performance well above that of the EU average and all other countries. Of these countries, Germany is improving its performance fastest while Denmark is stagnating.' Creativity and innovation are closely linked. The scoreboard included an analysis of creativity and design indicators, which showed that countries with a good creative climate tend to have higher levels of R&D and design activities, and also strong overall innovation performance. An increasing number of researchers are being attracted to Europe from third countries, and Europe is producing more research graduates than ever; however, the share of researchers in the labour force is still lower than in the US or Japan. European researchers are publishing in professional journals more than any other region, but US researchers still lead in high-impact publications. The competitiveness report also indicates much room for improvement in the number of European patents filed. According to the innovation scoreboard, 'The remaining gap with both the US and Japan is concentrated in four areas: international patenting [...] public-private linkages and numbers of researchers (despite the improvements in both these areas), and business R&D expenditures.' Commissioner Potocnik concluded by saying: 'The first steps in implementing the European Research Area, which is measured for the first time in this report, show encouraging results. The EU has become more open to the world, and is increasingly attractive to foreign investments, students and researchers. Work remains to be done to accelerate these trends but actions taken by the Commission and Member States are starting to pay off.' The European Innovation Scoreboard is published independently, and includes innovation indicators and trend analyses for the EU27 Member States as well as for Croatia, Turkey, Iceland, Norway and Switzerland.