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R&D boost for European businesses
Investing enough to catch up with US rivals

By Steve Ranger

Published: Thursday 24 August 2006

Companies in Europe are digging deep and upping their research and development budgets - and may even catch up with their US rivals.

According a European Commission survey, businesses in the region plan to up their R&D spending by five per cent per year over the next three years.

The EU said that at that rate, European companies would - for the first time in several years - be doing at least as well as their US counterparts in terms of investment. Taken together, the 449 respondents to the survey account for nearly €30bn in R&D investment.

Companies like to keep R&D work in their own country, the report found, and the top locations for research continue to be Germany, the UK and France. Outside of the EU, the US is the most attractive location, followed by China and India.

Getting access to top researchers is a driver for R&D locations - but trying to finding cheap researchers is less of a priority, the survey found.

On average 18 per cent of research and development is outsourced - two thirds to other companies and one-third to public research organisations, with pharmaceuticals and biotechnology outsourcing the most R&D (25 per cent).

Europe wants as much as three per cent of its gross domestic product in research - which means increasing investment by the private sector, said Janez Potoènik, European commissioner for science and research.