Europe's R&D: Missing the Wrong Targets? Bruegel policy brief 2008/03, February 2003

van Pottelsberghe, Bruno. (2008) Europe's R&D: Missing the Wrong Targets? Bruegel policy brief 2008/03, February 2003.

Abstract

Summary. Europe is not delivering on its Lisbon agenda commitment to increase its R&D-to-GDP ratio to three percent by 2010. This is worrying, not only because Europe seems unable to reach an objective it has publicly set itself, but mainly because in 2006 its R&D intensity was still below two percent, having flatlined for more than two decades. As far as businessfunded R&D is concerned, the Chinese business sector has even outperformed European firms. The Lisbon-inspired national R&D targets are equally overambitious. The European Commission’s benchmarking of member states against the headline three percent figure is questionable because such comparisons rarely take into account the effect of industrial specialisation. For most countries, R&D intensity is a by-product of specialisation. However, Swedish and US R&D intensity is higher than their industrial structure would suggest, implying that other factors are at work, such as a large integrated technology market and a superior academic research environment.