EU Industrial R&D Investment Scoreboards 2011

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capture it indirectly, putting forth a relationship between innovation input andoutput and incorporating it into the estimation.This trajectory that goes from research to new products and/or new processesmay be complex. For example, it is quite unlikely that a doubling of theinvestment will double the output, since some of the factors (e.g. skilledworkers) may become scarcer and since the effectiveness may depend on firmcharacteristics, e.g. on the size, if there are fixed costs. Not to mention that timelags should be accounted for.Unfortunately this is not enough, although company level data are necessary tocontrol for the huge amount of heterogeneity, it should be taken into accountthat a company growth is not necessarily equivalent to employment creation. Afirm can grow at the expense of other, less efficient competitors, capturing theirmarket shares. This indirect effect is one of the many spillovers effects relatedwith the accumulation of new knowledge.Using a flexible formulation that account for much of these complications, arecent study by Bogliacino 21 based on a set of data from earlier Scoreboardsestimated the impact of R&D on employment in form of elasticity, i.e. thepercentage change on labour demand induced by a one percent increase ofR&D. This increase in labour demand will translate into more employmentceteris paribus, i.e. it will depend also on the dynamics of wages (and soultimately depending on institutional factors, bargaining powers and supply ofproper skills).The results of the econometric analysis by Bogliacino show that the elasticity isnot constant with sales. But the interesting result is that it increases with theresearch intensity of companies as follows:• with a research intensity of 1%, doubling the R&D investment will increaselabour demand by a range from 8 to 15%;• with a research intensity of 5%, doubling the R&D investment will increasethe labour demand by 15 to 20%.Employment trendsIn 2010, the Scoreboard companies employed 41.19 million people: 17.09million by EU-399 companies; 9.99 million by US-486 companies; 7.12 millionby Japan-230 companies and 6.99 million by OC-162 companies.The number of employees of the 1400 companies increased by 3.0% in 2010compared with a decrease of 1.2% in the year before. These employmentfigures appear less 'elastic' than the rates of growth of R&D and net sales thatincreased more in 2010 (4.0% and 9.4% respectively) but had also decreasedmore in 2009 (-1.9% and -10.1% respectively).21 Bogliacino, F., (2010) "Innovation and Employment: A firm level analysis with European R&D Scoreboard data". IPTS WorkingPapers on Corporate R&D and Innovation (http://iri.jrc.es/papers.htm).60The 2011 EU Industrial R&D Investment Scoreboard
Table 21 shows the ranking of industrial sectors in terms of the total number ofemployees, together with the annual growth rates, the average R&Dinvestment/employee ratio and the operating profits/employee ratio.Trends of employment for Scoreboard companies 22 over the past 8 years areshown in Figure 10 where annual growth rates of employment are indicated forindustrial sectors grouped in high, medium and low R&D intensity.The sector with the largest number of employees in the Scoreboard isAutomobiles & Parts. The importance of this sector is highlighted by the factthat it is also the second largest sector by net sales and the third largest byR&D investment (first R&D investor in the EU group of companies). Most of thesectors accounting for a large proportion of R&D investment are also among thetop sectors in terms of number of employees.The R&D/employee ratio ranges from €56288 in the Pharmaceuticals andBiotechnology sector to €858 in the Food and Drug Retailers sector. Most R&Dintensive sectors show high average R&D/employee ratio.Over the last year, sectors with the highest increase in employment areAutomobiles & Parts (6.9%), Food Producers (6.2%), Software and ComputerServices (6.1%) and Industrial Engineering (5.8%). In contrast, employmentperformance by Banks (-2.5%), Fixed Line Telecom (-1.5%) and Oil & GasProducers (-1.2%) fell. Over the last 3 years, with the exception of the FixedLine Telecom sector, all industries showed positive annual growth rates ofemployment.The profits/employee ratio ranges from €116489 in the Oil & Gas Producerssector to €8846 in the Food and Drug Retailers sector. Among the big R&Dinvesting sectors, there are big differences in terms of profits/employee ratio,e.g. €73720 in Pharmaceuticals % Biotechnology versus €20114 in Automobiles& Parts.The employment trends for the sectors of high, medium and low R&D intensityover the past 8 years show different behaviour. The employment growth in highR&D intensive sectors appears more positive and in particular less affected bythe economic downturn (see Figure 10). This may suggest that the relationshipbetween R&D and employment depends on the R&D intensity of companies, asfound by the econometric analysis discussed in the section above.22 For a sample of 1000 (462 EU and 538 non-EU) companies for which data is available for all years in the 2011, 2007 and2006 Scoreboards adjusted to the 2011 Scoreboard exchange rates .61The 2011 EU Industrial R&D Investment Scoreboard 61
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Figure S1. One-year R&D investment,
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The specialisation of EU companies
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A high number of the companies in t
Page 13 and 14: 1. IntroductionThe 2011 "EU Industr
Page 15 and 16: Table 1. Profile of the 2011 Scoreb
Page 17 and 18: 2. OverviewIn the last year compani
Page 19 and 20: Survey on R&D investment by the EU
Page 21 and 22: 3. Top R&D investing companiesThis
Page 23 and 24: R&D changes driven by Mergers and A
Page 25 and 26: Dynamics of top R&D companiesEvery
Page 27 and 28: 4. R&D distribution by regionThis c
Page 29 and 30: Figure 3.R&D investment by the top
Page 31 and 32: R&D Trends of companies in Member S
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Page 35 and 36: The actual contribution of an indus
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Page 39 and 40: Those based in the US specialise in
Page 41 and 42: Figure 7. Annual growth rates of ma
Page 43 and 44: Table 10.Ranking of industrial sect
Page 45 and 46: The profitability of US companies (
Page 47 and 48: Electronic equipment / LeisureThis
Page 49 and 50: Alternative energyAs observed in pr
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Page 53 and 54: The list of the companies showing t
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Page 57 and 58: Oil equipment, services & distribut
Page 59 and 60: Table 18. Fast growing companies in
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Page 83 and 84: Standard (IAS) 38 “Intangible ass
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R&D Investment2010change10/09Net Sa
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5.2 Ranking of the top 1000 non-EU
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R&D InvestmentNet SalesR&D/NetSales
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EU Industrial R&D Investment Scoreboards 2011

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