Growth in investment in R&D by companies in the European Union has surpassed that of the US and China, reversing the downward trend first recorded in 2013. This is the headline finding of the latest edition of the EU Industrial R&D Investment Scoreboard, released this week, but the detailed picture is more complicated.
The 2024 scoreboard analyses the world's top 2,000 industrial R&D investors, responsible for over 85% of R&D performed by the business sector globally, based on the financial information in the
latest published audited accounts of firms.
During 2023, compared with 2022, nominal European industry R&D investment increased 9.8%, compared to 9.6% in China and 5.9% in the US. Overall the US continues to be the largest investors in R&D, spending a total of €531 billion compared to the €235 billion invested across the EU - and the €215 billion spent by China.
On a global scale, R&D investment growth slowed in 2023, coming in at 7.8% compared with 12.6% in 2022. However, the world’s top 2,000 companies still invested a record €1257.7 billion in R&D in 2023.
The report said that the highest relative growth was in the energy sector in 2023, while health sector R&D investment dropped to its lowest rate since 2013 with a modest increase of 4.9%, although spending by some pharma companies such as Novo Nordisk (+35%), Biontech (+29.7%), Eli Lilly and Moderna grew significantly.
R&D spending in the chemicals industry was down in 2023 across the EU, US and China when inflation was taken into account.
The top 2000 companies include 322 EU-based companies, 681 US companies, 524 from China, 185 from Japan and 288 from the rest of the world. The top 50 R&D investors in the 2024 scoreboard includes a number of pharma companies: Roche, Johnson & Johnson, Merk US, Pfizer, AstraZeneca, Eli Lilly, Bristol-Myers Squibb, Novartis, Sanofi, GSK, Bayer, and Takeda Pharmaceutical.
Looking at the European Union, the survey notes that the top 800 companies in the bloc invested a total of €247 billion in R&D during 2023, representing an 8.7% increase on 2022. While the automotive sector led R&D investments the report notes: “Some of the EU companies in the semiconductor, automotive components, and biotech and pharma sectors have seen extraordinary increases in R&D investment, growing between two to fifty times over the past decade. Such investment increases suggest ongoing diversification and significant growth potential in these areas.”
Highlighting the importance of SMEs, the scoreboard notes that of the 99 SMEs included in the EU sample of companies, 75% are active in the pharmaceutical and biotech sector. Of the EU SMEs - companies with less than 250 employees - those in France led R&D investment followed by Sweden and the Netherlands. These SMEs invested €2.4 billion in R&D in 2023, a 3.7% increase on the previous year. On a wider scale the top EU R&D investors remain located in Germany, France and the Netherlands.
Research and innovation have been placed at the heart of the EU's economic growth, as the bloc moves to a clean and digital economy and increased sustainable competitiveness. Commenting on the latest data Ekaterina Zaharieva, Commissioner for Startups, Research and Innovation said: “Research and innovation investments will determine tomorrow’s economy, industry and competitiveness. We count on the contribution of European corporate leaders to help close our innovation gap with other world regions. Solid innovation ecosystems will boost our start-ups and SMEs, and will contribute to our shared prosperity, building on our robust industrial base.”
The 2024 EU Industrial Investment Scoreboard provides economic information based on the financial year 2023 accounts of the world's top 2000 R&D investors, as well as the top 800 companies based in the EU. These companies account for 85-90% of global private R&D funding, the report says.
Further reading:
• Global Innovation Index: R&D funding robust but venture capital plummets
• Pharma R&D: Who is really setting the pace?
• Prioritise R&D spending says IEA report
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