European
Science, Technology and Innovation in the EU25 2004: Highest venture capital investment in Sweden and the United Kingdom
By Finfacts Team
Nov 20, 2006, 15:55

The latest panorama of Science, Technology and Innovation in Europe¹, published by Eurostat, the Statistical Office of the European Commission, reports on where the EU stood in 2004, and how its position has evolved in recent years.

The publication covers a wide range of Research & Development (R&D) data, including R&D expenditure, R&D personnel, patents, venture capital, high-tech external trade and other indicators related to high-tech and knowledge intensive sectors of the economy.

Germany and France together employ over 40% of the EU25's R&D personnel

In 2004, 2.82 million people were employed in the field of Research and Development in the EU25. Adjusted to take account of those working part time, this is the equivalent of 2.05 million full time jobs. Germany accounted for 23% of these full-time equivalents, followed by France (17%), Italy and Spain (both 8%).

In the EU25, more than half (53%) of R&D personnel were employed in the business enterprise sector in 2004, 31% worked in higher education, and 14% in the government sector. In the Member States for which data are available, the business enterprise sector employed the largest share of R&D personnel in fourteen Member States, the higher education sector in nine and the government sector in one (Cyprus).

One in two researchers in the EU25 worked in the business enterprise sector

Researchers alone accounted for the equivalent of 1.2 million full time jobs in 2004, 3.5% more than in the previous year. Most researchers were found in Germany (22% of the EU25 total), France (17% in 2003), Spain (8%) and Italy (6% in 2003).

In the EU25, half of the researchers were employed in the business enterprise sector, 36% worked in higher education, and 13% in the government sector. The business enterprise sector employed more than 60% of the researchers in Luxembourg (79%), Denmark (62%), and Germany (60%). In seven other countries, it employed more than 50%, Sweden (58%), Finland and Ireland (both 57%), Netherlands (53%), France and Belgium (both 52%). Over 70% of business enterprise sector researchers in the EU25 were employed in manufacturing industry, while 26% were employed in services.

The higher education sector employed the largest share of researchers in twelve of the Member States for which data are available, accounting for over 60% in Malta (80%), Latvia (72%), Lithuania (71%), Poland (65%), Estonia (64%), and Slovakia (61%), and over 50% in Greece (59%), Cyprus (54%), and Spain (51%).

R&D personnel and researchers, by institutional sector, in full-time equivalents, 2004

* 2003 data.
** For Hungary and Slovakia, figures for 'All sectors' and for 'Government' exclude defence
*** University graduates instead of researchers.
: Data not available.

e = estimated, p = provisional

High- and medium-high-tech manufacturing represents more than 10% of employment in Germany

High- and medium-high-tech manufacturing² provided 6.8% of total employment in the EU25 market economy in 2004. Among the Member States, the rate was highest in Germany (11.2%), the Czech Republic (9.0%), Slovakia (8.6%) and Slovenia (8.4%). The lowest rates were found in Cyprus (1.2%), Luxembourg (1.3%), Latvia (1.4%) and Greece (2.2%).

At regional level, Lombardia in Italy (444 thousand) employed most people in high- and medium-high-tech manufacturing, followed by Stuttgart (415 thousand) and Oberbayern (280 thousand) both in Germany. German regions accounted for 7 of the top 15 regions, Italy 4, France 2, Spain 1, and Denmark.

Employment in high- and medium high-tech manufacturing, 2004

External trade in high-tech goods most important in Malta, Ireland and Luxembourg

Exports of high-tech goods³ accounted for 18% of total exports from the EU25 in 2004, compared to 29% for the United States and 22% for Japan. In Malta (56%), Luxembourg and Ireland (both 29%), the United Kingdom (23%), Hungary (22%) and France (20%), high-tech goods represented a fifth or more of all exports, while in Latvia, Lithuania and Poland they represented around 3%.

Six Member States exported more than half of their high-tech exports to outside the EU25: Malta (65%), Finland (61%), Slovenia (59%), Portugal and Sweden (both 58%) and Latvia (51%).

Eight Member States exported more high-tech goods than they imported: Germany (112.3 billion euro of exports, compared to 99.9 bn euro of imports), Ireland (24.5 bn vs. 14.2 bn), France (72.9 bn vs. 69.3 bn), Finland (8.8 bn vs. 6.1 bn), Sweden (14.0 bn vs. 11.7 bn), the Netherlands (54.9 bn vs. 53.6 bn), Denmark (8.2 bn vs 7.6 bn) and Malta (1.1 bn vs. 1.0).

Foreign-owned firms are responsible for almost 90% of Irish exports.

Imports and exports of high-tech goods, 2004

Highest venture capital investment in Sweden and the United Kingdom

Venture capital investment⁴ (VCI) is defined as private equity raised for investment in companies. For smaller and medium-sized enterprises, having access to VCI is regarded as crucial for their growth and employment. The VCI data are broken down into two investment stages: earlier stage, and expansion and replacement stage

VCI at the earlier stage is made at the seed and start-up stages of a business, i.e. before or when a business is launched. In 2004, 0.02% of GDP was devoted to early stage VCI in the EU15, with the highest ratios in Denmark (0.09%), Sweden (0.08%) and the United Kingdom (0.05%).

VCI at the expansion and replacement stage supports enterprises at a later stage of their business development. Expansion capital helps fund the growth and expansion of a company, which may or may not break even or trade profitably, whereas replacement capital means the purchase of existing shares in a company from another private equity investment organisation or from other shareholders. At EU15 level, more VCI (0.09% of GDP) was available for the expansion and replacement stage of business development. Among the Member States for which data are available, expansion and replacement stage VCI was highest in the United Kingdom (0.18%), Sweden (0.16%) and Spain(0.15%).

Venture Capital Investment, in % of GDP

: Data not available.

1. Eurostat, “Science, technology and innovation in Europe: 2006 edition”, ISBN 92-79-02577-5, paper: 25 euro (excl. VAT), PDF: free download from Eurostat website, publication available in English only.
2. High- and medium high-tech manufacturing includes the following industries: chemical and chemical products (including pharmaceuticals, medicinal chemicals and botanical products), office machinery and computers, radio, television and communication equipment and apparatus, medical, precision and optical instruments, watches and clocks, aircraft and spacecraft, machinery and equipment n.e.c., electrical machinery and apparatus n.e.c., motor vehicles, trailers and semi-trailers and other transport equipment.
3. High-tech goods include the following products: aerospace, computers & office machines, electronics & telecommunications, pharmaceuticals, scientific instruments, electrical machinery, chemicals, non-electrical machinery and armaments.
4. Venture capital investment (VCI) is defined as private equity raised for investment in companies (excluding management buyouts, management buy-ins, and venture purchase of quoted shares). VCI here refers to investment made at the seed or start up of a business, i.e. before or when a business is launched (early stage VCI) and to venture capital support at later stages of development, such as expansion of the business or the purchase of existing shares in a company from another private equity investment company (replacement capital).