October 9, 2007 8:43 AM PDT

Europe sees rise in R&D spending

EU-based companies increased their research and development investments over the past fiscal year, but their spending continues to lag behind competitors outside the bloc.

R&D spending in the top 1,000 European Union-based companies grew 7.4 percent during the period. But that figure was 10 percent for the top 1,000 non-EU companies, according to the 2007 European Union Industrial R&D Investment Scoreboard.

Still, the latest EU figures are an improvement over 2006 when R&D spending at the top 1,000 EU companies grew by 5.3 percent.

Janez Potocnik, EU commissioner for science and research, said the positive upward trend in R&D investment over the past two years is encouraging. The EU's innovation strategy is "on the right track," he said.

But Potocnik added that the only way for Europe to improve its R&D performance is for more companies to see the benefit of investing.

The European Commission attributes part of the gap in investment to the higher growth of R&D-intensive sectors outside the EU.

In general, the pharmaceutical and biotech industry overtook the technology hardware and equipment sector for R&D spending growth.

Globally, U.S. carmaker Ford lost its top spot to pharmaceutical manufacturer Pfizer, which spent $8.1 billion. Top in the EU was DaimlerChrysler of Germany with $7.3 billion.

In terms of tech companies, Microsoft was fourth of the non-EU companies. Intel was eighth, and IBM was ninth.

In Europe, Nokia was sixth, and Ericsson was ninth. Other tech companies in the European top 50 include Alcatel Lucent, BT, SAP and Siemens.

In total the 2,000 Scoreboard companies spent $524 billion on R&D during the 2006-2007 fiscal year.

The Investment Scoreboard is produced as part of the European Commission's Industrial Research Investment Monitoring activity.

Tim Ferguson of Silicon.com reported from London.

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