Azara Blog: EU is not anywhere near meeting its R&D spending target

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Date published: 2007/06/12

The BBC says:

The European Union's vision of building a hi-tech economy could be left in the dirt if businesses do not spend more on research and development (R&D).

That is the conclusion of a European Commission report comparing R&D in the EU with that of its competitors.

Europe will be outdone by China, Japan and South Korea unless EU member states take urgent action, it says.

The report says boosting R&D spend is essential if Europe's economy is to remain competitive in the future.

It sought to make Europe "the most competitive and the most dynamic knowledge-based economy in the world" by 2010.

Key to this vision was boosting investment in R&D to 3% of GDP by that same deadline. But Europe looks set to miss this objective.

The report, which contains new data on Europe and its main competitors, says that R&D intensity (R&D expenditure as a percentage of GDP) in Europe has stagnated since the mid-1990s.

At the same time, Japan, China or South Korea have been able to increase substantially their R&D effort.
...
The European Commission says that differences in the industrial structure of the EU compared with countries such as the US are the main cause for this low level of business R&D spend.

The EU has a smaller high-tech industrial sector, that area of the economy which usually spends most on R&D.

The article's statement that "Europe looks set to miss this [ the 3%] objective" is a bit of an understatement. The current level is around 1.8% and has been the same for the last ten and more years. The EU is not poor yet, but it might well be in future.

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