Increasing and improving Research and Development (R&D) investment in Europe is at the heart of the EU's Lisbon Strategy. However, information permitting consistent comparisons, across the EU and across different sectors, of current and prospective trends in R&D investment practices of firms is presently not available. In order to support policy-makers in this field and monitor progress towards the Lisbon targets, the present survey gathers information, at a European level, on factors and issues which surround and influence R&D investment in companies. The survey is also a valuable source of information for companies and analysts in order to assess trends at corporate level.
This pilot survey on R&D investment business trends provides new insights into company expectations about future R&D investments and their motivations to invest in research. The main results are as follows:
- Companies expect their global investments in R&D to grow by around 5 % p.a. for the next three years. These expectations reflect the dominance in the sample of the companies in pharmaceuticals & biotechnology and chemicals, which together account for almost 60 % of the total R&D investment of all companies in the sample.
- The incentives to increase R&D investment most often cited in the responses are: changes in market demand for new products and services, changes in technological opportunities, and changes in company turnover or profit. Changes in the availability and labour costs of researchers are the least often cited incentives for increasing R&D investment.
- Own funds are by far the principal source for financing the company's R&D, followed by tax incentives and public grants.
- Companies outsource an average of 18 % of their R&D investment. Around two thirds of this goes to other companies and one third to public research organisations. The sector which outsources most of its R&D is pharmaceuticals and biotechnology (25%), and the least is IT hardware (5%).
- The most important factors when deciding where to locate R&D are: market access, high availability of researchers, access to specialised R&D knowledge and results, macroeconomic and political stability, and R&D cooperation opportunities. The often mentioned labour costs of researchers seem to be less significant.
- The survey confirms the view that companies continue to prefer to locate R&D in their home-country. Therefore, the top locations for R&D activity in Europe continue to be Germany, the United Kingdom and France. Outside the EU, the US remained by far the most attractive place for locating R&D activity, followed by China and India.
- New products resulting from R&D are mainly exploited by the company itself.
The results are drawn from the responses received from 449 companies covering ten sectors: automobiles & parts, chemicals, electronic & electrical equipment, engineering & machinery, food producers & processors, health, IT hardware, pharmaceuticals & biotechnology, steel & other metals and support services. Taken together, the 449 responding companies are responsible for a total global R&D investment of almost €30 billion, which is a significant share of European business investment in R&D.