EUROPE: Ensuring better use of R&D

The failure of business to invest significantly in innovation projects remains the major weakness in the European Union's research picture, says the European Commission. The commission says there has been substantial progress in some aspects of the EU's innovation performance but investments by business in R&D and IT projects are "still relatively weak, especially if compared with the US and Japan".

Expenditure by EU companies on innovative activities such as training, design, marketing and new equipment had declined over the year and there was still work to be done, said Günter Verheugen, the EU commissioner for enterprise and industry policy.

On the plus side, the 2008 European Innovation Scoreboard (EIS), published by the commission last week, found the relative innovation gap with the US and Japan was reduced, in particular amid strong progress by many new member states such as Cyprus, Romania and Bulgaria.

Generally across the EU, progress was made in human resources and the availability of finance for innovation. "There has been a particular progress in human resources for innovation - graduates and tertiary education, and in broad-band access and availability of venture capital," the EIS said.

Although based on data that preceded the financial crisis, the commission comments that progress made by the EU prior to the financial upheaval "has put European entrepreneurs in a better position to recover through innovation". It says the UK, Switzerland, Sweden, Finland, Germany and Denmark are the leaders in innovation, followed by Austria, Ireland, Luxembourg, Belgium, France and the Netherlands.

A separate 2008 Science, Technology and Competitiveness report claims that "Europe's pool of researchers is growing and the EU is becoming more attractive for foreign researchers and for private R&D investments from the US". But it adds that the "stagnation" of the EU's R&D intensity (R&D expenditure as % of GDP) at 1.84% "is denting the EU's ambition to become a globally competitive knowledge-based society".

Brussels concludes that a continued low level of business R&D investment, linked to an EU industrial structure with a smaller high tech sector than in the US, is hampering the EU's performance. It says the EU must change its industrial structure, gear up on innovation and ensure more and better use of R&D.

alan.osborn@uw-news.com