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R&D expenditure in the EU increased slightly to 2.07% of GDP in 2017

Eurostat's first estimates of Research & Development (R&D) expenditure in the European Union (EU) show that Member States spent all together almost EUR 320 billion on R&D in 2017. The R&D intensity – R&D expenditure as a percentage of Gross Domestic Product (GDP) – stood at 2.07 percent in 2017, a slight increase compared with 2.04 percent in 2016. Sweden, Austria, Denmark and Germany topped the tables all with R&D intensity above 3 percent of GDP.

Eurostat’s first estimates of Research & Development (R&D) expenditure in the European Union (EU) show that Member States spent all together almost EUR 320 billion on R&D in 2017. The R&D intensity – R&D expenditure as a percentage of Gross Domestic Product (GDP) – stood at 2.07% in 2017, a slight increase compared with 2.04% in 2016. Sweden, Austria, Denmark and Germany topped the tables all with R&D intensity above 3% of GDP (graphic courtesy Eurostat).

Research and development (R&D) is a major driver of innovation, and R&D expenditure and intensity are two of the key indicators used to monitor resources devoted to science and technology worldwide. In order to provide a stimulus to the EU’s competitiveness, an increase by 2020 of the R&D intensity to 3% in the EU is one of the five headline targets of the Europe 2020 strategy.

The main analysis of R&D statistics is based on four institutional sectors of performance. These four sectors are the business enterprise sector, the government sector, the higher education sector, and the private non-profit sector. R&D expenditure data considers the research performed on the national territory, regardless of the source of funds.

According to Eurostat, the statistical office of the EU, a decade ago in 2007 R&D intensity in the EU was 1.77%. Compared to other major economies, R&D intensity in the EU was much lower than in South Korea (4.22% in 2015), Japan (3.28% in 2015) and the United States (2.76% in 2015), while it was at about the same level as in China (2.06% in 2015) and much higher than in Russia (1.1% in 2015) and Turkey (0.96%).

The business enterprise sector continues to be the main sector in which R&D expenditure was spent, accounting for 66% of total R&D disbursed in 2017, followed by the higher education sector (22%), the government sector (11%) and the private non-profit sector (1%).

R&D intensity above 3% in Sweden, Austria, Denmark and Germany

In 2017, the highest R&D intensities, all with R&D expenditure above 3% of GDP were recorded in Sweden (3.33%) and Austria (3.16%), followed by Denmark (3.06%) and Germany (3.02%). Finland (2.76%), Belgium (2.58%) and France (2.25% in 2016) registered R&D expenditure between 2.0% and 3.0% of GDP.

At the opposite end of the scale, eight Member States recorded a R&D intensity below 1 percent: Romania (0.5%), Latvia (0.51%), Malta (0.55%), Cyprus (0.56%), Bulgaria (0.75%), Croatia (0.86%), Lithuania and Slovakia (both 0.88%).

Over the last ten years, R&D intensity rose in twenty-one Member States, with the highest increases in Austria (from 2.42% in 2007 to 3.16% in 2017, or +0.74 percentage points – pp) and Belgium (from 1.84% in 2007 to 2.58% in 2017, or +0.74 pp).

Conversely, R&D intensity decreased in six Member States and most strongly in Finland (-0.59 pp) and Luxembourg (-0.33 pp). In Malta, R&D intensity remained at the level of 0.55%.

Highest share of R&D spending in the business enterprise sector in Slovenia and Hungary

The main sector in which R&D was performed in 2017 was the business enterprise sector in all Member States, except Cyprus and Latvia (where the higher education sector was the dominant performing sector) and Lithuania (where the share of higher education sector was the same as of business enterprise sector).

The highest shares of R&D expenditure performed in the business enterprise sector were observed in Slovenia (75%), Hungary (73%), Ireland and Sweden (both 71%), Bulgaria and Austria (both 70%), Germany (69%), Belgium and the United Kingdom (both 68%).

For the government sector, the highest shares were registered in Romania (32%), Lithuania (28%), Luxembourg and Latvia (both 26%). The highest shares of R&D conducted within the higher education sector were recorded in Latvia (47%), Portugal (43%), Cyprus (42%) and Estonia (40%).

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