Innovation Files has moved! For ITIF's quick takes, quips, and commentary on the latest in tech policy, go to itif.org

Innovation Fact of the Week: EU Private Sector R&D Investment is 57% of U.S. Level

eu-investment

(Ed. Note: The “Innovation Fact of the Week” appears as a regular feature in each edition of ITIF’s weekly email newsletter. Sign up today.)

After controlling for GDP, businesses in the European Union were investing 57 percent as much in research and development (R&D) as their U.S. counterparts as of 2013. This should be of great concern to EU member countries since the bloc’s public investment in R&D was similar to that of the United States—just under 1 percent of GDP. Simply put, European businesses haven’t been doing enough to spur innovation in the region’s economy.

A successful innovation ecosystem requires robust investment from both public institutions and private industry. Bruegel, a Brussels-based economic policy think tank, has examined key measures of the region’s innovation capacity and found that the gap between the EU and United States reflects “a growing innovation-performance divide” between EU member states themselves. Bruegel finds that compared to EU’s innovation leaders (Denmark, Finland, Germany, and Sweden), other EU countries invest between 20 percent and 70 percent less in business R&D.

Read last week’s Innovation Fact of the Week

Photo Credit: Rock Cohen via Flickr

Print Friendly

About the author

John Wu is an economic research assistant at ITIF His research interests include green technologies, labor economics, and time use. He graduated from the College of Wooster with a bachelor of arts in economics and sociology, with a minor in environmental studies.