European R&D spend still playing catch up

R&D spending by European companies grew by a "very encouraging" 5.3 per cent last year, leading to hopes the R&D "investment gap" can be closed.

The top 1,000 EU companies raised their research and development spend by an average of 5.3 per cent last year.

According to the European Commission's Industrial R&D Investment Scoreboard, 18 out of the top 50 biggest spenders on R&D are European. Five of the 10 companies with the fastest spending growth are from the EU too.

And European commissioner for science and research, Janez Potoènik, said in a statement: "This year's R&D scoreboard is very encouraging. If this trend continues, we could gradually close the R&D investment gap."

But the EU still lags behind the 7.7 per cent average increase of the top 1,000 non-EU companies.

IT and communications companies featured heavily in the report, with Nokia ranked the biggest technology R&D spender in Europe, spending €3.98bn in 2005, up 3.8 per cent from 2004. This places the company 12th globally. Ericsson is not far behind, being placed 10th in the EU (€2.73bn).

But carmakers led the way overall, with Ford the biggest spender from any sector (€6.78bn) and DaimlerChrysler top in the EU, with a total spend of €5.65bn.

Pharmaceutical companies were also well represented with Pfizer second overall and AstraZeneca ninth in the EU.

Telcos made big increases in R&D spending, with BT boosting its investment by 39.3 per cent to €1.06bn. Similarly, France Telecom increased its 2005 investment by 27 per cent.

Other technology companies well represented in the EU list include Dutch semiconductor producer STMicroelectronics in 21st place, and German software company SAP at number 24.

Of the other non-EU based technology companies, Microsoft came in at fifth globally after spending €5.58bn. IBM and Intel were also up there, in 11th and 12th place worldwide, spending €4.56bn and €4.36bn respectively.