Investment in intangible assets
| Author | Lukas Borunsky, Ana Correia and Ruzica Rakic |
| Pages | 257-356 |
CHAPTER 5
INVESTMENT IN R&D
KEY FIGURES
17 %
of world R&D
expenditure
attributed
to the EU
24
Member States
have increased
their R&D
intensity
since 2000
1 %
annual increase
of EU R&D
intensity
since 2000
7 %
of EU public funding
comes from the
European Commission
2/3
of EU R&D expenditure
performed by the
business sector
258
What can we learn?
With only 6 % of the world population, the EU
accounts for almost 20 % of global R&D
expenditure.
With 2.19 % of its GDP invested in R&D,
the EU is still far from its 3 % target.
It underinvests compared to its main
competitors, especially in terms of private
investments.
EU R&D expenditure is largely dominated
by a limited number of big countries
(61 % in Germany, France and Italy together).
R&D intensity increased over the 2000-
2018 period in 24 Member States, with
national R&D intensity ranging from 0.5 % in
Romania to 3.3 % in Sweden.
Member States are slowly steering their
national budgets towards societal and
environmental challenges.
What does it mean for policy?
R&I policy needs to leverage further
efforts in R&D investments.
Because of the scope, scale and urgency of
the societal challenges facing Europe, policy
is required to pay more attention not just
to the volume of R&D investments, but
also to the overall direction of these
investments.
Given the significant increase in R&D tax
incentives over the last decade, there is
a need to assess the use of this instrument
in supporting transitions that require
coordinated and strategic investment.
259
CHAPTER 5
1. EU’s share in world R&D expenditure is declining
1 R&D expenditure is measured in PPS€ at 2010 prices and exchange rates.
World R&D expenditure is continuing
to increase as all major regions have
boosted their R&D spending. The EU’s
relative weight in this global R&D
landscape is decreasing, although it still
accounts for almost 20 % of global R&D
expenditure. In 2017, the EU represented
17 % of total R&D expenditure in the world1,
down from 22 % in 2000 (Figure 5.1-1).
The EU’s continuously declining EU’s share in
world R&D expenditure is mainly due to the
rapid rise of China whose share has increased
almost fivefold from 5 % in 2000 to 24 %
in 2017. The decline of the US share since
2000 has been even more pronounced than
that of the EU, from 37 % in 2000 to 26 %
in 2017. The share of the developed Asian
economies shrank from 18 % in 2000 to 15 %
in 2010, while the rest of the world’s share
has remained stable at around 12 %.
Figure 5.1-1 Evolution of world expenditure on R&D in real terms(1), 2000-2017
Science, research and innovation performance of the EU 2020
Source: DG Research and Innovation, Chief Economist - R&I Strategy & Foresight Unit based on Eurostat, OECD, UNESCO
Notes:
(1)
GERD in PPS€ at 2010 prices and exchange rates.
(2)
Japan+South Korea+Singapore+Chinese Taipei.
(3)
Brazil+Russian
Federation+India+South Africa.
Stat. link: https://ec.europa.eu/info/sites/info/files/srip/2020/parti/chapter51/figure-51-1.xlsx
0
200
400
600
800
1 000
1 200
1 400
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
EU
United States
Developed Asian economies(2)
China
BRIS(3)
Rest of the World
PPS€ 2010 (billions)
1 600
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