Investment in R&D by top European firms grew by 6 per cent last year, but competitors are growing faster

EU companies are lagging behind in R&D investment compared with major competitors from the US and some Asian economies, according to the European Commission’s 2011 EU Industrial R&D Investment Scoreboard.

Although top EU companies invested 6 per cent more last year than in 2009 (when investment fell by 2.6 per cent), US companies increased their R&D investment by 10 per cent (after a 5 per cent decrease in 2009). Companies from some Asian countries continued to show very strong growth in R&D investment, including 29.5 per cent for Chinese companies and 20.5 per cent for those from South Korea. Globally, R&D investment increased by 4 per cent in 2010, after a 1.9 per cent drop in 2009. 

The annual EU scoreboard covers the world’s top 1400 companies (400 based in the EU and 1000 from outside) ranked by R&D investments. 

This year, there are considerable signs of recovery, the report says. However, companies still have to deal with a complex economic environment. In this context, the efforts made by many scoreboard companies to increase R&D investment appear ’especially remarkable’.

’The upturn in R&D investment by EU companies is a positive signal,’ says Máire Geoghegan-Quinn, European commissioner for research, innovation and science. ’However, the fact that we are still lagging behind some global competitors shows we have to improve conditions for business further. We need quick adoption and implementation of recent and upcoming European Commission proposals on the unitary patent, on standards, public procurement and risk capital.’

The global top 50 in terms of total R&D investment includes 15 EU companies, 18 US firms and 13 from Japan. Two pharmaceutical companies occupied the top spots: Swiss-based Roche (€7.2 billion (£6.3 billion)), followed by US giant Pfizer (€7 billion). Volkswagen (€6.3 billion), in sixth place, is the biggest EU investor in R&D, followed by Nokia (11th with €4.9 billion), Daimler (13th with €4.8 billion) and Sanofi-Aventis (14th with €4.4 billion).

The three sectors of pharmaceuticals and biotechnology; technology hardware and equipment; and automobiles and parts, constitute more than half of worldwide R&D investment. Global R&D investment by pharmaceutical and biotechnology companies grew 6 per cent in 2010, a little more than 2009. In both the US and the EU, the share of R&D held by pharmaceuticals and biotechnology increased considerably (from 12 per cent to 18 per cent in the EU and from 18 per cent to 25 per cent in the US). However, global R&D in the chemicals sector remained flat, growing only 0.6 per cent.

’If the UK and Europe are to remain at the forefront [of life sciences] then we must continue to encourage investment - the risks involved with research must be rewarded, and we will need to see the continued support of the government and the EU if this is to happen,’ says Stephen Whitehead, chief executive of the Association of the British Pharmaceutical Industry. ’Global competition is increasing - the developing BRIC [Brazil, Russia, India and China] economies, in particular, will attract greater investment in future. ’

Maria Burke