Europeans Surpass American And Japanese in R&D Spending

November 19, 2009 8:19 a.m. EST

Washington, DC (AHN) - European companies spent on average 8.1% more on research and development in 2008 than they did in 2005 according to a ranking released in the European Union.

Two EU companies - Germany's Volkswagen and Finland's Nokia - and five US companies - including Microsoft, General Motors and Pfizer - are among the top 10 R&D investors. The world's biggest single investor was Japan's Toyota, with 7.61 billion Euros (1 Euro=$ 1.5 approx.)

The trends are released in the EU's 2009 R&D investment scoreboard, with a survey of 2,000 companies (1,000 from the EU, others mostly from the US and Japan) that represent 80% of R&D spending by businesses worldwide.

The European Commission, the executive arm of the EU noted that the increase in the 27 member European bloc is "roughly the same annual increase two years running," despite the economic crisis.

European research commissioner Janez Poto?nik welcomed the results saying, "This is the best strategy to emerge stronger out of the crisis," as the commission reiterated that R&D investment is essential to remain competitive in the global economy.

The survey pointed that American and Japanese businesses, the EU's biggest rivals in R&D spending, also stepped up investment in new product creation, but the increase - 5.7% and 4.4% respectively - was not as great.

The report highlighted that 2008 is the second year running that the R&D growth rate for EU companies was higher than for US companies while the EU also outpaced Japanese companies for the fourth consecutive year.

European research commissioner Janez Poto?nik welcomed the results saying, "This is the best strategy to emerge stronger out of the crisis," as the commission reiterated that R&D investment is essential to remain competitive in the global economy.

Although European companies are pumping money into R&D at a faster rate than their US and Japanese rivals, they still spend less in real terms.

European investment as a percentage of sales was 2.7% in 2008, compared with 4.5% in the US and 3.4% in Japan. Those numbers are similar to 2007.

US companies increased their lead over the EU in sectors where R&D is most intense - pharmaceuticals, biotechnology, information and communication technologies.

But spending on alternative energy is growing and dominated by EU companies.

Globally, industrial R&D investment grew by 6.9% - less than in 2007 (9%) and 2006 (10%).

Companies from emerging economies account for a small share of the total investment, but that is changing. China spent 40% more on R&D last year than in 2007, India 27.3 % and Taiwan 25.1%.