EU based companies step up efforts in innovation to fight economic crisis

According to the EU Survey on R&D Investment Business Trends, worldwide corporate investment in research and innovation proved resilient to the global recession in 2009. The data released by the Survey show that top companies based in the EU expect their global research and development investments to grow by 5% annually from 2011 to 2013, highlighting the
strategic importance that the largest corporate investors attach to R&D.

The companies surveyed also revealed that an average of 27% of their annual sales comes from innovative products introduced in the past three years, demonstrating again that innovation is the key to commercial success and to job creation. In these context, top companies based in the EU expect their global research and development (R&D) investments to grow by 5% annually from 2011 to 2013.

However, according to the EU Survey on R&D Investment Business Trends, overall R&D figures mask significant differences in individual industrial sectors. Investment in innovation in the Pharmaceuticals sector continues to rise whereas the Automobiles and IT hardware sectors show a substantial decrease. These differences are also patent in terms of investment in Member states, being that different R&D growth rates across Member States reflect differences in sector composition. Most of the overall R&D decrease in the EU group comes from countries with a large share of Automotive R&D, e.g. Germany and France, and IT hardware R&D, e.g. Finland and Sweden.

In general terms, the increase in R&D investment expectations is more than the regiestered in 2012, and represents a significant upturn from the 2.6% R&D cuts in investment implemented by these companies in 2009. Despite this increase, the expected figures for R&D investment in the EU are still lower that those registered in other other world regions, the companies still expect to locate 75% of their investments in the EU. They expect to make the largest percentage increases in R&D investment in China (25%), Japan (17%), other European countries (8%), India (8%) and the US and Canada (5%).

This trend shows that EU-based companies want to benefit from the growth in emerging economies while still retaining a strong overall focus on the EU. This is confirmed by the companies' figures for nominal R&D investment amounts, which are set to increase by €2.2 billion over the next three years in the EU and €2.7 billion outside the EU.

The main factors identified as positive to attract investment in innovation in the EU were the availability of qualified personnel and of public support such as grants and fiscal incentives. On the contrary, factors perceived as negative for all sectors were enforcement costs of Intellectual Property Rights (IPR) and the time needed to obtain IPR protection. This highlights the importance of fostering an innovation-friendly IPR regime, where the proposed unitary EU patent will be a significant step forward in this respect.