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Europe

By R&D Editors | December 17, 2012

Europe Chart
2013 GDP, billion US$, PPP $18,545
2013 GERD, billion US$, PPP $349.50
R&D/GDP 1.88%
Population, million 711
GERD/Person $491
Published Research Papers, Total 400,700
U.K. Research Papers 55,085
Germany Research Papers 104,600
France Research Papers 74,100
Italy Research Papers 49,700
Source: Battelle/R&D Magazine, UNESCO, Thomson Reuters

Half of the Top 40 R&D spending countries in the world are in Europe, but they only account for 22.6% of the total global spending. Another 14 European countries increase that spending by $10.7 billion (23.4% of the global total). Over the past five years, Europe has continuously declined in its share of global R&D spending, while Asian countries have dramatically increased their share and the U.S. has declined slightly. Europe’s debt crisis has weighed heavily on its overall R&D spending plans, as the European Union struggles with ways to prevent the collapse of the debt-ridden EU-member economies of Greece, Spain, Italy, and Portugal. The market uncertainties of these financing plans have affected the global economy from the U.S. to China.

Ten years ago, the EU set a goal of investing 3.0% of its combined GDP in R&D. Due to the debt crisis and the 2009-10 global recession, that goal was not met and the combined investment ratio now sits (mostly stable) at 1.88%, buoyed in most part to the large R&D spending plans of Germany and a few other countries (Sweden, Finland, and Denmark—all with long-standing R&D/GDP ratios greater than 3.0%).

Economic Challenges
One of the linchpins in the European debt crisis (and survival of the Euro and possibly the EU itself) was establishment of the 2012 bailout plan for Greece. The bond-buying program established by the European Central Bank promises to ease the EU’s financial problems and create an environment more conducive to R&D investments. Italy, Spain, Portugal, and Greece are all still expected to see diminished GDP in 2013 according to the International Monetary Fund, but substantially smaller declines than in 2012. Those four are the only European countries to see a decline compared to 11 countries that saw their GDP decline in 2012.

European academic research has shifted slightly over the past 10 years to be more like the U.S. academic system, which involves more diversity than its European counterparts. European universities followed the strict Humboldt model and focused primarily on research, which has been found to be not as efficient as a more balanced structure.

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New Framework Programme
Over the past two decades, the EU’s successful Framework Programme (FP) has worked to change the mostly national pattern of European universities to one of a much greater degree of cooperation between universities in different countries. Other inter-European academic programs such as the European Research Council and the European Institute of Innovation and Technology have been created to enhance the Framework Programme. The current 7th FP (2007-2013) will be replaced next year with the 8th FP (2014-2020). The 8th FP (named Horizon 2020) features a 46% budget increase over the 7th FP to $115 billion, with 8.5% of the EU’s overall budget dedicated to research and innovation. It sets an objective for creating 3.0% of all EU’s GDP invested in R&D by 2020.

The 8th FP also aligns priorities established for previous programs to common strategic priorities, focusing on societal challenges, competitiveness, and research excellence. The FP also eliminates gaps between stages of previous programs to coherent support across the innovation cycle and more standardized rules across all initiatives. Funding for the research and innovation projects has been greatly simplified for the 8th FP with common rules and funding schemes. Research project proposals were requested to be submitted before the end of 2011.

Europe’s Industrial R&D
Company 2010 R&D mil. U.S. $ R&D, % Revenue Country
Volkswagen 7,980.1 4.90% Germany
Nokia 6,296.9 11.60% Finland
Daimler 6,187.2 5.00% Germany
Sanofi 5,598.1 13.60% France
GlaxoSmithKline 5,584.0 13.20% U.K.
Siemens 5,408.1 5.60% Germany
Robert Bosch 4,876.3 8.10% Germany
Bayer 4,094.6 9.20% Germany
AstraZeneca 4,087.0 12.90% U.K.
EADS 3,932.7 6.70% Netherlands
Source: Battelle/R&D Magazine, EU Industrial R&D Scoreboard

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