European
R&D in EU27: Spend as % of GDP stable at 1.84% in 2005 - highest R&D intensities in Sweden at 3.86% of GDP, Finland at 3.48%, Ireland at 1.25%
By Finfacts Team
Jan 12, 2007, 15:15

The European Union's logo in the Irish language, to mark the golden jubilee of the signing of the Treaty of Rome

In 2005¹ the EU27 spent just over €200 billion on Research & Development² (R&D). R&D intensity (i.e. expenditure as a percentage of GDP) in the EU27 stood at 1.84%, the same as in 2004. R&D intensity remained significantly lower in the EU27 than in other major economies. In 2004, R&D expenditure was 2.68% of GDP in the United States, 3.18% in Japan, while it has reached 1.34% in China in 2005. R&D expenditure³ in the EU27 rose by 1.5% in real terms on average per year between 2001 and 2005, compared to 1.7% in the United States and 2.0% in Japan between 2001 and 2004.

In 2004 the business sector financed 55% of total EU27 R&D expenditure, while the corresponding share was 64% in the United States, 75% in Japan and 66% in China.

This information comes from Eurostat, the Statistical Office of the European Commission.

R&D intensity varies from 0.4% of GDP in Cyprus and Romania to 3.9% in Sweden

In 2005, the highest R&D intensities among the Member States were registered in Sweden (3.86% of GDP) and Finland (3.48%), followed by Germany (2.51%), Denmark (2.44%), Austria (2.36%) France (2.13%) and , Ireland (1.25%).

The lowest intensities were found in Romania (0.39% in 2004), Cyprus (0.40%), Bulgaria (0.50%) and Slovakia (0.51%).

Annual average growth rates of R&D expenditure in real terms over the period 2001 to 2005 ranged from +18% in Latvia, +17% in Estonia, +15% in Cyprus and +11% in Lithuania to -2% in Belgium and Slovenia and -1% in Slovakia.

Largest shares of R&D financed by business sector in Luxembourg, Finland, Germany and Sweden

The business sector finances the highest share of EU27 expenditure on R&D (55%), followed by the government sector (35%) and funding from abroad (8%). Among Member States, Luxembourg (80%) recorded the largest share of R&D expenditure financed by the business sector in 2004, followed by Finland (69%), Germany (67%), Sweden (65%), Belgium and Denmark (both 60%). Three Member States registered shares for the business sector of 20% or less: Malta and Cyprus (both 19%) and Lithuania (20%).

Research and Development expenditure

: Data not available

p: estimated or provisional data

EU27, EU25 and EU15: Eurostat estimate

Exceptions to the reference year: * 2004, ** 2003, *** 2002, ****2000.

% annual average growth is for 2001-2005 except for Luxembourg: 2000-2005; Turkey: 2001-2002; Italy, Netherlands, United Kingdom, Iceland, Japan and USA: 2001-2004; Croatia: 2002-2004.

Hungary: Excludes defence

USA: Excludes most or all capital expenditure

China, USA and Japan: OECD

1. Preliminary data for 2005. The figures for R&D intensity for previous years have been revised downwards compared to those published in News Release 156/2005 of 6 December 2005, due to upward revisions in the level of GDP for the EU and the majority of Member States, in particular following the allocation of FISIM (Financial Intermediation Services Indirectly Measured) to user sectors.
2. The EU goals in Research and Development, as set by the Lisbon summit strategy, are to achieve by 2010 a R&D intensity of at least 3% for the EU as a whole, and to have two thirds of R&D expenditure financed by the business sector.
3. R&D expenditure is expressed in million current euro while the annual average growth rates in real terms of R&D expenditure are calculated from expenditure expressed in million constant 1995 Purchasing Power Standard (PPS). PPS is an artificial currency that reflects differences in national price levels that are not taken into account by exchange rates. This unit allows meaningful volume comparisons of economic indicators over countries. Aggregates expressed in PPS are derived by dividing aggregates in current prices and national currency with the respective Purchasing Power Parity (PPP).