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European businesses predict increase in R&D investment

A European Commission survey has claimed that major EU-based companies are expecting their R&D budgets to grow by 4 per cent a year over the next two years, despite the uncertain economic outlook.

However the survey drew responses from less than one-fifth of the firms asked — and an equivalent survey two years ago predicted increased spending, which then failed to materialise, the Commission admitted.

The 2012 Survey of R&D Investment Business Trends indicated a “positive and stable trend for R&D investment growth,” its authors claim. However, the prediction is a decrease of one per cent from last year’s survey and remains significantly lower than the 7 per cent growth predicted before the 2008 economic crisis.

The highest level of investment is predicted for the software and computer sector, with companies envisaging an increase of 11 per cent per year on average.

“This positive trend for corporate R&D investment is essential for European competitiveness,” said research commissioner Máire Geoghegan-Quinn in a statement accompanying the survey’s publication.

Survey respondents said that fiscal incentives and national and EU grants had a strongly-positive impact on innovation activity, while the high costs of hiring researchers and protecting intellectual property were perceived as negative factors. “This underlines the importance of an efficient IPR regime for the support of company innovations,” the survey says.

The US was viewed by respondents as the best non-EU location for R&D outsourcing, followed by India and China.

The survey was conducted by the Commission’s Joint Research Centre’s Institute for Prospective Technology Studies based in Seville, Spain. It gathered 187 responses to a questionnaire sent to 1,000 companies. Previous surveys have been broadly confirmed in practice, and annual growth rates were higher than predicted from 2006 to 2009 — although in 2010 investment decreased by 2 per cent when the survey had expected 2 per cent growth.