UNESCO SCIENCE REPORT

UNESCO SCIENCE REPORT
Table 9.2: GERD/GDP ratio in the EU28 in 2009 and 2013
and targets to 2020 (%)
GERD/GDP
ratio, 2009
* or latest available year
** The national target of 2.5% of GNP is estimated as being equal to 2.0% of GDP.
Source: Eurostat, January 2015
GERD/GDP
ratio, 2013*
Target
for 2020
Industryinanced
share
of GERD, 2013*
EU28 1.94 2.02 3.00 54.9
Austria 2.61 2.81 3.76 44.1
Belgium 1.97 2.28 3.00 60.2
Bulgaria 0.51 0.65 1.50 19.4
Croatia 0.84 0.81 1.40 42.8
Cyprus 0.45 0.48 0.50 10.9
Czech Rep. 1.30 1.91 – 37.6
Denmark 3.07 3.05 3.00 59.8
Estonia 1.40 1.74 3.00 41.3
Finland 3.75 3.32 4.00 60.8
France 2.21 2.23 3.00 55.4
Germany 2.73 2.94 3.00 66.1
Greece 0.63 0.78 0.67 32.1
Hungary 1.14 1.41 1.80 46.8
Ireland 1.39 1.58 2.00** 50.3
Italy 1.22 1.25 1.53 44.3
Latvia 0.45 0.60 1.50 21.8
Lithuania 0.83 0.95 1.90 27.4
Luxembourg 1.72 1.16 2.30–2.60 47.8
Malta 0.52 0.85 0.67 44.3
Netherlands 1.69 1.98 2.50 47.1
Poland 0.67 0.87 1.70 37.3
Portugal 1.58 1.36 3.00 46.0
Romania 0.46 0.39 2.00 31.0
Slovakia 0.47 0.83 1.20 40.2
Slovenia 1.82 2.59 3.00 63.8
Spain 1.35 1.24 2.00 45.6
Sweden 3.42 3.21 4.00 57.3
UK 1.75 1.63 – 46.5
Less high-tech R&D than Japan and the USA
The Lisbon Strategy fixed the target of having business
contribute two-thirds of GERD (2% of GDP) by 2010. This
target has not been reached either, although the business
sector funds more than half of R&D (55%), on average
(Figure 9.3). Business is currently the largest source of R&D
funding in 20 member states, with shares of 60% or more of
GERD in Belgium, Denmark, Finland, Germany and Slovenia.
The general pattern in the EU is that the business sector
spends more money on performing research than it does on
financing it. This is the case in all but Lithuania and Romania.
Interestingly, funding from abroad is the most important
source for Lithuania, as also for Bulgaria and Latvia. As a
group, the first 15 members of the EU lag behind many
advanced economies when it comes to the intensity of
business R&D (Figure 9.4). This largely reflects the economic
structures of some of the larger member states such as Italy,
Spain and the UK that are less focused than other economies
on technology-intensive industries.
Company-level R&D intensity (as a share of net sales) tends to
be strongly correlated with the productive sector. The EU R&D
Scoreboard shows that EU businesses tend to be more heavily
concentrated in R&D of medium-to-low and low intensity,
in comparison to their principal competitors, the other two
members of the Triad, the USA and Japan (Table 9.3 and
Figure 9.5).
Moreover, although EU-based companies accounted for
30.1% of total R&D spending by the world’s top 2 500
companies, there are only two EU-based companies in the
top ten, both of them German and both in the automotive
sector (Table 9.3). Indeed, the top three R&D performers in
the EU are the German automotive companies Volkswagen,
Daimler and BMW (Tables 9.3 and 9.4). The automotive sector
represents one-quarter of R&D spending by EU companies
covered in the EU R&D Scoreboard, three-quarters of which is
accounted for by German automotive companies.
The EU is largely absent from the arena of internet-based
companies active in new and emerging forms of innovation.
According to Downes (2015), none of the 15 largest public
internet companies today are European. Eleven are US-based
and the remainder are Chinese. Indeed, the EU’s attempts
to replicate a Silicon Valley-type experience 10 have not lived
up to expectations. The principal EU giants specializing in
hardware within the digital economy (Siemens, Ericsson,
Nokia) have even lost a lot of ground in the past decade
in global R&D rankings. Nonetheless, the German-based
software and IT services company SAP has recently joined the
global top 50 R&D performers (Table 9.3).
Business R&D performance in the EU has also been weighed
down by the disappointing growth of R&D in sectors such as
pharmaceuticals and biotechnology (0.9 % R&D growth in
2013) or technology hardware and equipment (-5.4%), which
are typically R&D-intensive. Whereas the EU is almost on a par
with the USA in pharmaceuticals, it trails the USA in the area
of biotechnology (Tables 9.5 and 9.6).
There are emerging concerns in Europe about the erosion of
its science base through takeover bids from competitors. One
illustration of this concern is the aborted takeover bid by the
US pharmaceutical company Pfizer in 2014. Pfizer found itself
obliged to reassure the UK government that its £ 63 billion
bid to buy the Anglo-Swedish pharmaceutical company
AstraZeneca would not affect research jobs in the UK.
Although Pfizer promised that a combined company would
10. One example is the technology cluster in central and east London known as
Tech City. See: www.techcityuk.com
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