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EC Releases Corporate R And D Investment Scoreboard

by Ulrika Lomas, for LawAndTax-News.com, Brussels

08 October 2007


The European Commission on Friday published the 2007 edition of its annual scoreboard of companies' spending on research and development.

The scoreboard showed that corporate R&D has increased by 10% in the year under scrutiny, with EU-based companies increasing their R&D investment by 7.4%. This compared to 5.3% growth reported in the 2006 edition.

The scoreboard also showed an upward trend in companies' profitability all over the world. The world's biggest investor in R&D in the 2007 Scoreboard is US-based Pfizer, with EUR5.8 billion. The top EU company is Germany's DaimlerChrysler, with EUR5.2 billion

"We are only ever going to improve our R&D performance if more companies see the benefit of investing in research," observed European Science and Research Commissioner Janez Potocnik, continuing:

"The positive upward trend in R&D investment seen in the last two years is encouraging, and leads me to believe that our innovation strategy is on the right track. But we must not allow ourselves to be complacent – quite the opposite: we should reinforce the positive measures already taken to consolidate and improve private investment in R&D."

The EU Industrial R&D Investment Scoreboard is published annually by the European Commission as part of its Industrial Research Investment Monitoring activity. The figures are derived from company accounts for the previous financial year and indicate the investment made by a company from its own funds.

The Scoreboard does not reflect where the expenditure was made, just the origin of the company making the investment. The Scoreboard comprises the top1,000 R&D companies from the EU, and the top1,000 R&D companies from the rest of the world. Altogether, the 2,000 Scoreboard companies invested EUR372 billion in R&D, estimated to represent more than 85% of corporate expenditure on R&D worldwide.

According to the EC:

"On the downside, the report shows that R&D investment by EU companies is still growing at a lower rate than their non-EU counterparts, a trend identified in every edition of the Industrial R&D Scoreboard published to date. This difference is primarily explained by a growth rate in high R&D-intensive sectors outside the EU of almost twice that within the EU. These sectors also account for a much larger proportion of R&D outside the EU. Nevertheless, the EU did record the highest growth in fixed capital investment. This represents an important part of total corporate investment that also underpins investment in innovation."

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