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1. European Commission, Joint Research Centre
Motivation:
Corporate R&D is a driver for innovation, competitiveness
and job creation. This conviction has originated the EU
"Barcelona" R&D expenditure target: 3% GDP, two-thirds of it
by private sector. The recent European Union strategy for
jobs, growth and investment has renewed its importance.
However, The literature addressing the main factors that
determine corporate R&D intensity often reaches differing
conclusions (Moncada-Paternò-Castello, 2016). In contrast,
only a limited number of studies have investigated the
intensity of corporate R&D by combining several parameters
and for a several years (Reinstaller and Unterlass, 2012).
Focus:
With 2006-2014 EU R&D Scoreboard data, we analyse:
 R&D investment of firms by R&D intensity sectors in
main world regions in 2005-2013
 Decompose R&D corporate intensities in "intrinsic" and
"structural" elements & analyse its trend of EU vis-à-vis the
US, Japan, Switzerland, Asian Tigers, and BRIC countries.
 Demographics and distribution of R&D intensity and
investment across firms, sectors and countries
Main Results:
A stable EU R&D investment growth rates, resistant to
the economic and financial turbulences. ▼
Figure 1. R&D investment in 2005- 2009-2013 in selected countries/
regions by sector group (€ million)
Note:"RoW" stands for countries from the rest of the word.
Grouping of industrial sectors according to R&D intensity of the sector
worldwide: High = above 5 %; Medium-high = 2 % to 5 %; Medium-low
= 1 % to 2 %; Low = less than 1 %.
No signals over a decade for the EU to bridge the
corporate R&D intensity performance gap. ▼
EU R&D intensity gap vs. main competitors is mainly
due to structural factors. ▼
A superior EU performance in R&D intensity by
individual firms in their respective sectors, though the
structure of the economy is liable for the widened
aggregate gap vs. USA and Japan. Both EU and USA
are losing ground vs emerging economies. ▼
Table 1. Decomposition of R&D intensities in selected countries/regions
using the EU sample for comparison (2005, 2009 and 2013)
 A concentration of global R&D investment in a handful
number of firms, mostly located in USA, EU and
Japan, and in a few industries (sectors). ▼
Figure 2. Ten sectors with highest global corporate R&D investment
concentration in 2013 (€ mill.)
Note: *= High R&D intensity sectors (R&D intensity >5%).
 There is a scarcer population of smaller EU R&D
investors that invest more strongly in R&D vis-à-vis
main benchmarking countries ▼
Figure 3. Cumulative average of R&D intensity by firms' R&D investment
size and countries (2013)
Note: The value of y axe is the cumulated R&D intensity; the value of the x
axe is the firm's ranking position by their R&D investment
 Policy should address the EU industrial structural and
demographic change via business creation and
transformation and its sustained R&D-led growth.
Such objectives will be also reached by making EU the
most attractive world region for the global top R&D
investors.
Source: Moncada-Paternò-Castello, P. (2016). "EU corporate
R&D intensity gap: What has changed over the last decade?"
JRC Working Papers on Corporate R&D and Innovation No.
05/2016, JRC102148 Growth and Innovation Directorate,
Joint Research Centre – European Commission. Seville
(Spain), July 2016. http://iri.jrc.ec.europa.eu/papers16.html
EU corporate R&D intensity gap:
What has changed over the last decade?
Contact
Pietro Moncada-Paternò-Castello
European Commission • Joint Research Centre
E-mail: Pietro.Moncada-Paterno-Castello@ec.europa.eu
Objective: A EU private R&D intensity gap vs. main competing economies has been observed and originated a related policy
target in 2003. This research aim at investigating the causes and trends in the EU effort for the achievement of
corporate R&D intensity target, and the possible implications for EU policy.
Data: Micro-data of 1250 companies from the European Industrial R&D investment Scoreboard, 2006-2014.
Approach: De-composing R&D investment (van Velsen,1988; van Reen 1997; Lindmark et al., 2010) overall R&D intensity into:
 intrinsic due to investment behaviour and  structural due to differences in sector composition.
Other statistical computations methods used to analyse R&D intensity demography by firms, sectors and countries.
Results: Do not indicate a systematic EU underinvestment in R&D, but rather a big difference in sector mix. Trends
do not suggest the achievement of EU policy target in R&D intensity. There is an high concentration of the
global corporate R&D investment in the Triad, and a larger population of smaller USA firms that invests more
strongly in R&D than the EU ones, thus raising the overall R&D performance of the USA vs EU.