European companies expect to increase research and development spending by 5 per cent annually over the next three years, an EU survey found, helping the region to catch up with big investors Japan and the United States.
European Commission statement
Spending on R&D is seen as a sign of potentially healthy growth for firms and progress in technology that helps boost economies and create jobs. But previous surveys have shown the gap between the EU and Japan and the United States was widening.
In its new survey, the EU executive Commission asked 449 companies, with R&D investments totalling €30 billion, about future spending intentions and called the results "a considerable improvement over recent years".
"At that growth rate (5 per cent a year), European companies would be doing at least as well as their US counterparts in terms of R&D investment for the first time in several years," the European Commission said in a statement.
Last year, R&D spending by EU companies rose by a meagre 0.7 per cent, although that was an improvement on a decrease of 2 per cent the previous year.
Since this survey of companies' intentions is the first one conducted by the Commission, it is not possible to compare what firms said they will do and what they actually will do.
Heads of European Union states want R&D spending, comprising public funding and private investment, to reach 3 per cent of gross domestic product (GDP) by 2010.
At the moment, that figure is closer to 1.9 per cent, short of the US rate of 2.6 per cent and 3.2 per cent in Japan.
The survey found that the key incentives for companies to invest in R&D was first and foremost market demand for new products, followed by technological opportunities and the potential profits derived as a consequence.
Of those that told the survey they did not invest in R&D, many said they received research results from third parties. Others said such expenditure was irrelevant or that they had limited technological opportunities.
The survey also showed most EU firms still prefer to base R&D activities at home, making Germany, Britain and France the most popular countries for such activities.
But some EU investment does end up outside the bloc, chiefly in the United States, China and India.