R&D investment by EU companies has increased by 8.8% compared to the increased R&D investment by US companies of 8.6%, according to the 2008 edition of the European Commission's annual Industrial R&D Investment Scoreboard. Trends show increased sales and profitability for EU companies and for the first time since records began in 2004, R&D investment growth in the EU companies is greater than that of their US counterparts.

The EU Industrial R&D Investment Scoreboard is published annually by the European Commission as part of its Industrial Research Investment Monitoring activity. It shows that worldwide corporate R&D investment growth decreased from 10% in last year's Scoreboard to 9%, but EU corporate R&D investment growth increased by 8.8%, up from 7.4% on last year's Scoreboard.

EU companies are almost closing the gap in R&D growth rate compared to all non-EU companies, and it is slightly ahead of the R&D investment growth rate in US Scoreboard companies, which has dropped sharply from 13.3% to 8.6%.

European Science and Research Commissioner Janez Potočnik, welcomed these results, highlighting the fact that “in particular, companies in the energy field are rapidly increasing their R&D investments, responding to the need to make more efficient use of limited resources. However, private sector R&D in Europe remains at 1% of GDP, amidst signs that EU companies are making an increasing share of their R&D investments outside Europe. Therefore, we must continue our efforts to make Europe a more attractive place for business R&D, notably by creating a truly European Research Area, in order to reach the Lisbon objectives ".

Company trends

Three EU companies are ranked in the top ten investors in R&D:

• Nokia, the top EU company, has moved from 17th position last year to 5th position this year.
• Volkswagen has moved up from 14th position to 9th position.
• Daimler has moved down from 5th to 10th position.

Glaxo Smith Kline and Siemens dropped out of the top 10, and there is three US companies which are in the top positions: Microsoft, General Motors and Pfizer.

The business performance of Scoreboard companies further improved in the past year. Sales of EU companies grew by 7.0% – resulting in a small increase in R&D intensity – and sales of non-EU companies grew by 9.2%. The profitability of EU companies increased to 12.2%, against 11.3% in non-EU companies.

Sector trends

In terms of sectoral results, Pharmaceuticals & biotechnology sector was a reinforced in its top position, accounting for more than 19 % of the R&D investments made by all Scoreboard companies together.

Regarding the biggest EU sector in terms of R&D investment, the Automobiles & parts sector, R&D investment growth (6.9%) was considerably above the three year average annual growth rate (4.9 %). Whereas Volkswagen and Toyota Motor raised substantially their R&D (by 16.1% and 9.6%, respectively), General Motors had the biggest increase in R&D (22.7%).

In the Energy filed, some large European companies showed high annual R&D growth rates over the past three years, such as the case of Royal Dutch Shell and AREVA. Even higher growth rates are found amongst some companies in the field of alternative energies.

EU Industrial R&D Investment Scoreboard methods

The 2008 EU Industrial R&D Investment Scoreboard looks at R&D investment data from 2000 participating companies' own accounts over the 2007/8 financial year. The sample comprises the 1000 EU companies investing the largest sums in R&D and the 1000 non-EU companies investing the largest sums in R&D.

All the data come from publicly available audited accounts. The data is based on the location of the registered office of the company conducting the R&D, and not on the location where the R&D is performed.