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2012 Global R & D Funding Forecast: Euro Research Keeps Pace

Fri, 12/16/2011 - 2:47am
Martin Grueber, Research Leader, Battelle and Tim Studt, Editor-in-Chief, Advantage Business Media

2012 GFF Globe ImageThe European Union (EU), one of the "R&D Triad" regions along with the U.S. and Asia, consists of 27 countries and three candidate countries (Croatia, Macedonia, and Turkey). The EU and 11 other countries all participate in the European Commission's (EC's) Seventh Framework Programme (FP7) for Research and Technological Development—which runs from 2007 to 2013 with a budget of about $10 billion per year. The success of these research programs is expected to result in extended funding of about $15 billion per year for FP8, which is scheduled to run from 2014 to 2020, and for which planning is now proceeding. The EU expects FP8 to grow the region's annual gross domestic product (GDP) by more than $100 billion and create about 175,000 short-term jobs and nearly 450,000 long-term jobs, while keeping pace with research activity in the U.S. and China. Launched in 1984 to fund European research, each FP has been larger and more comprehensive than its predecessors.

R&D Programs
The EU's biggest-ever R&D funding package, consisting of nearly $10 billion of FP7 grants, was made this past summer to about 16,000 recipients, with special attention for small and medium enterprises. The EU has generally been successful with research programs, which include the European Space Agency, the European Laboratory for Particle Physics (CERN) and the Large Hadron Collider, the European Molecular Biology Laboratory, and the European Science Foundation.

Even as the EU itself is threatened by the weak economic conditions globally and within some member states, the turmoil does not seem to have affected R&D funding. While the EU has the smallest share of the Triad's global R&D investments (24%), it has the largest proportion of Top 40 R&D spenders (21). Even EU countries that are economically stressed or have had EU-sponsored bailouts are members of the Top 40 (Ireland, Greece, Portugal, and Italy). To be sure, there are large variations in research intensities in the EU, from 0.5% gross expenditure on research and development (GERD)/GDP ratios (Bulgaria, Slovakia, and Cyprus) to 3.5% (Finland) and 3.64% (Sweden).

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click to enlarge

Graph shows expected change in 2012 European R&D.
Source: Battelle, R&D Magazine Survey

R&D Distribution
Europe's structure of R&D funding and performance is different than that in the U.S. Varying according to the degree of socialization in various regions of the Europe, about 36% of the total R&D funding comes from government sources, ranging from just 22% in Switzerland, where 70% is provided by industrial sources, to 62% in Romania, where just 33% comes from industrial sources. Performance of R&D in government laboratories also varies greatly, from just 2% in Switzerland to 36% in Poland. While most of Europe's R&D is performed in industrial laboratories, this share also varies, from just 24% in Turkey, where nearly 70% is performed in academia, to 74% in both Sweden and Switzerland.

Consistent with trends in international collaboration discussed elsewhere in this report, the EU is expanding its collaborations with Asia, with more than 30 major R&D agreements now in place with China and more than 200 R&D projects per year. The China–EU Science and Technology Partnership Scheme (CESTYS) was signed in Prague in 2009 to provide the foundations for co-funded research projects. Other China–EU agreements include the joint energy development programs with China's Ministry of Science and Technology (MoST) and the Directorate General for Research (DG-RTD) research programs on ICT, life sciences, materials, and geosciences. Strategic China–EU summits on various topics are held several times each year. The EU has also signed numerous science and technology agreements with Russia. All of these collaborations are made to strengthen intercountry cooperation and facilitate the two-way flow of students and scientists.

In 2000, EU leaders set a goal for investing 3% of their combined GDP in their total R&D spending by 2010. While this goal was constantly focused on for several years, it became readily apparent by 2006 that it would not be met. Indeed, the actual ratio for 2010 was only 1.91%. The successful and growing FP and the somewhat limited industrial-academia research institute Joint Technology Initiatives (JTI) have created the start of a balanced investment portfolio of small (FP) and large (JTI) research programs. Initial JTI research involves medical, computer, energy, environment, and materials programs.

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