European firms to boost R&D spending

12 August 2011

BRUSSELS: Most of Europe's biggest brand owners plan to raise research and development budgets as they seek to drive growth and enhance their capabilities across various disciplines.

The European Commission's Joint Research Centre surveyed 205 companies from its list of the 1,000 corporations spending the greatest amounts on R&D.

Its panel direct a combined €40bn to this area every year, equivalent to 30% of the entire outlay among the 1,000 leading players in the region in terms of their research budgets.

Overall, the featured firms intend to boost their expenditure by 5% per year between 2011 and 2013, almost doubling the forecast rate of 2.6% from the same study last year.

The projected increase reached 6.6% for "high-intensity" research and development sectors such as pharmaceuticals, technology hardware, software, computer services and leisure goods.

Spending should rise by 3% annually within the EU, where 75% of resources are allocated, measured against lifts of 25% in China, 17% in Japan, 8% in India and 5% for the US and Canada.

The core fields attracting funding include traditional innovation, on 95%, but market research, launch advertising and related activities when rolling out new goods was the second most popular destination for R&D funds.

Training, design - such as for packaging, products and graphics - and new information technology hardware and software are also anticipated to receive more financial support going forward.

Among the enterprises contributing to the study, innovative products had delivered 27% of their annual sales during the past three years, climbing to 40% in "high-intensity" firms.

"Business R&D is a key driver of sustainable growth and jobs," said Máire Geoghegan-Quinn, the commissioner for research, innovation and science.

"We will need to deliver an Innovation Union in Europe so that investing in R&D here is more attractive than doing so elsewhere."

Volkswagen, Nokia, Sanofi Aventis, Siemens and Daimler are among the European brand owners spending the most money on innovation, the European Commission's research showed.

Data sourced from European Commission; additional content by Warc staff