European Union firms have significantly increased their investments in research and development (R&D), rising above the world’s average growth rate. While the world’s top 2500 companies in terms of investment into R&D increased this investment by 5.8% over 2016, companies with headquarters in the EU did so by 7%, with growth driven mainly by the ICT, health and automotive sectors.

That is one of the main findings of the 2017 Industrial R&D Investment Scoreboard, published by the European Commission today. The Scoreboard also shows that the total investment of the top 2500 industrial players worldwide amounted to €741.6 billion in 2016, of which €192.5 billion was invested by the EU companies. An important number of these world’s top industrial R&D players are based in the EU (567 out of 2500; with 822 in the US, 365 in Japan, 376 in China and 370 in the rest of the world).

Carlos Moedas, Commissioner for Research, Science and Innovation, said: “The Scoreboard shows that EU companies continue to be major players in R&D investment, accounting for more than a quarter of the world’s total. But to stay ahead in the global innovation race, Europe needs to ensure that new companies join the ranks of top players. This is why we will support the very best innovations through the European Innovation Council pilot under Horizon 2020, our research and innovation programme.”

Tibor Navracsics, Commissioner for Education, Culture, Youth and Sport, and responsible for the Joint Research Centre, added: “The Scoreboard shows that Europe is again buzzing with innovation. To maintain the edge of our industry, we must continue investing in and reforming our educational systems. This forms the bedrock of Europe’s knowledge economy and its prosperity.”

According to the report, 2016 was the sixth consecutive year of significant increases in global R&D investments. EU companies’ 7% increase in R&D investments is similar to that of the US (7.2%) and substantially above that of Japan (-3.0%). Chinese companies increased their R&D investment by 18.8%, however their total R&D effort remains small compared to the size of the Chinese economy. ICT (+13.8%), health (+7.9%) and automotive (+6.7%) sectors have led the growth in R&D investments in the EU.

The Scoreboard also shows that global R&D is strongly concentrated with 40% of total R&D performed by the top 50 Scoreboard companies and 53% by the top 100 (with 16 EU companies in the world top 50 and 30 in the world top 100).

Furthermore, the 2500 top industrial players kept investing more in research even though their revenue growth was below that of R&D investment. They also created more jobs, with a 1.7% increase in the number of employees, reaching 53 million in total in 2016. The 567 EU based companies employed 18.8 million persons, 2.2% more than the year before.

Background

The EU Industrial R&D Investment Scoreboard is published annually since 2004 by the European Commission (DG Research & Innovation and Joint Research Centre). The 2017 edition covers the 2500 companies investing the largest sums in R&D in the world in 2016. The Scoreboard data, taken from companies’ latest published accounts, comprise key indicators on the 2500 parent companies and more than 700 000 subsidiaries that enable assessing companies’ economic and innovation performance. The 2500 companies, based in 43 countries, each invested over €24 million in R&D for a total of €741.6 billion, which is approximately 90% of the world’s business-funded R&D.