The Malta Independent 18 December 2017, Monday

Private sector and government decrease spending on R&D, only higher education increases it

Thursday, 7 December 2017, 09:54 Last update: about 10 days ago

Malta featured among the EU laggards in a Eurostat feature on R&D intensity this week, with Malta coming in with the fourth lowest intensity in the EU.

In 2016, the highest R&D intensities were recorded in Sweden (3.25%) and Austria (3.09%), both with R&D expenditure above 3% of GDP. They were closely followed by Germany (2.94%), Denmark (2.87%) and Finland (2.75%).

Belgium (2.49%), France (2.22% in 2015), the Netherlands (2.03%) and Slovenia (2.00%) registered R&D expenditure between 2.0% and 2.5% of GDP.

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At the opposite end of the scale, ten Member States recorded a R&D intensity below 1%: Latvia (0.44%), Romania (0.48%), Cyprus (0.50%), Malta (0.61%), Lithuania (0.74%), Bulgaria (0.78%), Slovakia (0.79%), Croatia (0.84%), Poland (0.97%) and Greece (0.99%).

Over the last ten years, R&D intensity rose in twenty-two Member States, with the highest increases in Austria (from 2.36% in 2006 to 3.09% in 2016, or +0.73 percentage points - pp) and Belgium (+0.68 pp).

Conversely, R&D intensity decreased in six Member States and most strongly in Finland (from 3.34% in 2006 to 2.75% in 2016, or -0.59 pp) and Luxembourg (-0.43 pp).

R&D intensity in Malta, that is, R&D expenditure as a percentage of GDP, rose from 0.58 in 2006 to 0.61 in 2016.

In money terms this means that Malta spent €31 million in 2006 compared to €61 million in 2016.

The main sector in which R&D was performed in 2016 was the business enterprise sector in all Member States, except Cyprus, Latvia and Lithuania (where the higher education sector was the dominant performing sector).

The highest shares of R&D expenditure performed in the business sector were observed in Slovenia (76%), Hungary (74%), Bulgaria (73%), Ireland and Austria (both 71%), Belgium and Sweden (both 70%) as well as Germany (68%).

Over the last ten years, the share of R&D conducted in the business enterprise sector increased in twenty Member States, while it decreased in eight.

For the government sector, the highest shares were registered in Romania (33%), Latvia (32%) and Luxembourg (30%).

The highest shares of R&D conducted within the higher education sector were recorded in Lithuania and Portugal (both 45%), Latvia (44%) and Cyprus (42%).

In the case of Malta, spending by the business enterprise decreased from 66% in 2006 to 63% in 2016.

Spending by government, never high in any case, decreased from 4% in 2006 to 1% in 2016.

It was only spending by higher education that rose, from 29% in 2006 to 35% in 2016.

In 2016, the Member States of the European Union spent all together over €300 billion on Research & Development.

The R&D intensity, i.e. R&D expenditure as a percentage of GDP, remained stable at 2.03% in 2016. Ten years ago (2006), R&D intensity was 1.76%.

With respect to other major economies, R&D intensity in the EU was much lower than in South Korea (4.23% in 2015), Japan (3.29% in 2015) and the United States (2.79% in 2015), while it was about the same level as in China (2.07% in 2015) and much higher than in Russia (1.10% in 2015) and Turkey (0.88% in 2015).

In order to provide a stimulus to the EU's competitiveness, an increase by 2020 of the R&D intensity to 3% in the EU is one of the five headline targets of the Europe 2020 strategy.

The business enterprise sector continues to be the main sector in which R&D expenditure was spent, accounting for 65% of total R&D conducted in 2016, followed by the higher education sector (23%), the government sector (112%) and the private non-profit sector (1%).

R&D is a major driver of innovation, and R&D expenditure and intensity are two of the key indicators used to monitor resources devoted to science and technology worldwide. 
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