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European Commission

Máire GEOGHEGAN-QUINN

European Commissioner responsible for Research, Innovation and Science

EU R&D Industrial Scoreboard

Berlaymont/Brussels

6 December 2012

Ladies and Gentlemen,

I am here today to praise EU business, and issue a warning to EU governments. I have some good news, and some bad news.

So first the good news. A ranking published today by the European Commission shows very clearly that EU firms see their future competitiveness in research and innovation, and that they have acted on that belief.

Major EU-based firms increased global R&D spending by 8.9% in 2011. This is a further improvement on last year's 6.1% rise, which keeps EU firms above the global average of 7.6% growth, and very close to leading US firms at 9%.

This data is from our EU R&D Industrial Scoreboard, a ranking of the top 1500 global R&D investors in the private sector, that between them account for almost 90 percent of business R&D spending worldwide.

The 405 EU-based firms on the list spent 144 billion euro on R&D last year, both figures second only to the US.

Japanese car manufacturer Toyota tops the ranking, while the top EU company is also a car maker: Volkswagen comes third with an investment of 7.2 billion euro last year. Other highly-ranked EU firms include Daimler in 13th, Nokia in 15th, Sanofi-Aventis in 16th, Glaxo SmithKline in 17th, and Siemens in 19th place.

The Scoreboard captures worldwide research spending of EU-based companies, but estimates suggest that they perform more than 70 per cent of their research inside the EU.

In addition, foreign firms still see the EU as an attractive research destination. US firms increased their R&D expenditures in the EU from 12 billion dollars in 2000 to 23 billion dollars in 2008. US firms still spend roughly ten times more on R&D in the European Union than in China and India combined.

That is how we get to another piece of (relatively) good news: recently released Eurostat data indicates that total public and private research spending increased to 2.03% of GDP in 2011, from 2.01% in 2010.

So despite the current deep economic crisis, research spending overall is being protected.

Now for the bad news. Protecting R&D spending at around current levels is not good enough if we are trying to create growth and jobs in Europe. An increase from 2.01% to 2.03% is not enough when we are trying to reach 3% by 2020, in order to keep pace with the global competition.

The issue here is that in terms of public funding of research, we are at risk of a dangerous stagnation. Research is an area where levels of public and private sector investment play a crucial role in supporting and leveraging private sector spending, particularly in activities involving high-risks and higher returns.

So, if we want to maintain the current high levels of ambition in the private sector, or to raise them even further, we need to increase public sector investment at both national and European levels.

Companies are increasing investment in R&D, not in spite of the crisis, but because of it. They know that, for them, it's a matter of survival. EU leaders need the same realisation.

The Commission has decided we need to invest more in research and innovation at the EU level, proposing 80 billion euro for the next EU budget.

So it is disappointing to think that Member States want to cut the EU budget – a budget that is focused on growth.

And it is particularly worrying to think that the research budget for Horizon 2020, as well as the budget for Erasmus and for Connecting Europe, might become the major victims of these cuts.

This is downright dangerous, economically and in terms of our knowledge base. We are at risk of shooting ourselves in the foot, just as we are starting to learn to walk again.

Everyone, including our EU leaders, preaches the value and the importance of research: to make our economies competitive, to solve our big problems, and to answer our big questions.

But when it comes to making tough budget decisions at a tough moment in history, those voices seem to fall silent, as vested interests and short-term political imperatives take over.

But it's not too late, and EU leaders can send a strong signal by approving an ambitious budget for Horizon 2020 when they meet again next year. It is of vital importance that they do.


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