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Private R&D budgets predicted to rise by 5 per cent a year till 2013

EU-based companies expect their R&D budgets to grow by 5 per cent a year until 2013, a survey today said.

This is a sharp increase compared to last year (2 per cent), but the figure remains lower than before the economic crisis (7 per cent in the 2007 survey), says the European Commission’s 2010 EU Survey of R&D Investment Business Trends.

Surveyed companies carry out a quarter of their research outside the EU, in particular in the US and Canada. They expect their R&D investment to grow by 3 per cent in the EU, and more sharply in other countries, in particular China (25 per cent) and Japan (17 per cent).

In absolute terms, the expected increases are €2.2 billion in the EU and €2.7bn outside the EU over three years.

“The decreasing share of R&D invested in the EU might be a source of concern, but takes place within an overall increase in R&D investment in all world regions over the coming years,” the survey comments.

Research commissioner Máire Geoghegan-Quinn said in a statement: “The survey provides welcome positive economic news and grounds for cautious medium-term optimism.” She added that the increase would need to be sustained after 2013, not only by the large companies covered in this survey but also by smaller businesses.

The survey shows that companies “believe they can invest because they have built up cash reserves, or because they believe they can raise finance, or both,” a Commission spokesman told a press conference in Brussels today.

The survey analysed business expectations for the coming years, not actual figures from previous years. The Commission spokesman said that the survey findings have been broadly confirmed in practice.

In fact, actual growth rates were higher than the expected figures from 2006 to 2009—except in 2010, when private R&D investment decreased by over 2 per cent, while the survey had expected a 2-per-cent growth.

This year’s survey gathered 205 responses to a questionnaire sent to 1,000 companies. Taken together, these companies spend about €40bn on research every year.

It was carried out by the Commission’s Joint Research Centre’s Institute for Prospective Technology Studies based in Sevilla, Spain.