The 2017 EU Survey on Industrial R&D Investment Trends The 2017 EU Survey on Industrial R&D Investment Trends

The EU R&D Survey is a yearly survey amongst the top 1000 EU-based R&D investing companies from the R&D Scoreboard. The 151 participating companies in this report declared a total R&D investment from their own resources of €53.9 billion in 2016, or more than one-quarter of the total R&D investment by the 1000 companies of the 2016 EU Scoreboard.

The companies that participated in the EU Survey on Industrial R&D Investment Trends expect R&D investment to increase by an average of 4.7% in the two years 2017 and 2018, with the highest growth expectations in the ‘Automobile and Other Transport' and ‘Health' sectors groups. Last year's expected growth was 1.4%. This year's expectations are the highest since 2007. If we compare only those companies that participated in the last three editions of the survey, the growth trend remains clear, with considerably higher growth expected in this year's edition (around 4.0%) than in the last two editions (around 2.5%).

Participating firms expect their R&D investments within the EU to increase by 3.5% p.a., while significant increases are expected in the US (+15.1%), China (+20.2%) and India (+22.1%). The proportion of R&D performed within the EU is expected to decrease slightly from 76.0% to 73.4% and has been around three-quarters throughout the EU Survey editions since 2006.

Quality and availability of researchers and macroeconomic and political stability are the factors that are rated most often as (highly) attractive by firms performing R&D in the EU only. If we look at firms that perform R&D in the US, we see that these firms value proximity to technology poles and access to markets much more highly than firms that do not perform R&D in the US. Firms performing R&D in China or India value low labour costs and proximity to suppliers much more than firms that do not perform R&D in China or India.

Access to markets, macroeconomic stability and quality of personnel are most often rated as the most attractive factors by firms only producing in the EU. Low employment protection is considered least important. Firms with production activities in the US mainly value quality of personnel and access to markets as important factors for deciding on where to locate production.

Around 80% of the total R&D investment made by the companies surveyed is spent in the later stages of the development process, namely applied and development activities. By contrast, ‘Basic research' accounts for only about one-tenth of all R&D investment, but also has the lowest concentration level[1] of all types of R&D, which indicates that many firms consider maintaining a level of 'Basic research' important.

The largest EU R&D investors are true global players, with the US, Germany, China and France being the main locations for R&D activities. One out of three companies performs R&D in each of the four main economic areas. At the same time, the historical location decision remains an important factor for locating R&D activities: 87% of the respondents mentioned the companies' headquarters location as the country where the highest proportion of R&D is currently being performed, which indicates that the internationalisation and offshoring of R&D activities does not necessarily lead to the disappearance of the home site. This may also be because of the capital intensive investments that have been made initially at the original location.

Quality and availability of researchers are factors that companies value the most for the attractiveness of an R&D location, while labour costs are the least important factor. However, low labour costs are rated as much more important by firms that perform R&D outside the EU than by firms that perform R&D only inside the EU. Together with proximity to technology poles, these are the factors that global firms perceive as much more important.