Les dépenses européennes de R&D loin derrière celles des Etats-Unis[en] 

Investing in R&D is a central pillar of the Lisbon Agenda and the European Investment Bank (EIB) plays an active role in financing this area. 

The EIB was created in 1958 by the Treaty of Rome, and is the long-term lending arm of the European Union. 

Last year it signed loans to support R&D by public and private entities totalling €7.1 billion, taking its total lending for R&D in the EU and partner countries in the past five years to €31.2 billion. 

The EIB's budget is provided mainly by member states, which are shareholders of the bank. The bank’s support for SMEs has so far been limited. However, the European Commission announced last September that the EIB's lending capacity is to be raised by €30 billion. 

The funds, which are to be used by 2011, will specifically finance small and medium-sized enterprises (SMEs). This will roughly double the bank's standard commitments to small businesses. 

The study, conducted by European Investment Bank economist Kristian Uppenberg and published yesterday (February 9) by the Centre for European Policy Studies (CEPS), shows that the EU is likely to fall short of achieving the Lisbon Strategy goal of investing 3% of GDP on research by 2010. 

While much attention has been given to Europe's lower levels of spending in the area of information and communication technologies, the real long-term challenge could be in services, according to the report. 

"Data covering the services sector is far from complete. But it appears that if Europe cannot close its R&D gap with the US in services, the overall R&D gap is likely to widen rather than narrow as the share of services in total value added grows," said Uppenberg. 

He also argued Europe must not neglect large companies and innovative clusters when seeking to catch up with long-term competitors. 

Uppenberg said companies tend to get better value for their investment when they are located close to other firms with high levels of R&D intensity, primarily due to a "spill-over effect". 

This implies that spreading investment across member states in the interest of regional equality can prove wasteful in terms of getting an optimal return on investment. 

Drawing on OECD data, Uppenberg's study shows that the share of small and medium-sized enterprises (SMEs) in total business R&D spending tends to be relatively small – less than one-fifth of the total – in countries with high aggregate R&D intensities. 

This group includes the US, Japan, Germany, the UK, France, Italy, Sweden, and Finland. The report suggests that a substantial part of the solution to Europe's low overall R&D intensity is for large firms to spend more on research. 

Public support aimed at spreading R&D evenly across all of Europe's regions or to create innovative centres where none existed before may thus be economically wasteful. 

On balance, the decomposition of R&D investments in Europe points to the need to respect the forces of market-driven innovation when designing public policy, according to Uppenberg. 

If Europe is to succeed in raising its overall R&D intensity towards the levels seen in the US and Japan, it will need to accept that large firms and existing innovative clusters will play a leading role in this expansion, he added. 

Jean-David Malo,  head of unit responsible for regions of knowledge and research potential at the European Commission's research directorate, said the EU is hampered by low private sector investment. He said having more researchers and engineers in the private sector is essential to ensuring that Europe has the capacity to absorb additional funds. 

Malo added that the Commission will launch three new public private partnerships (PPPs) next month, covering energy efficient buildings, factories of the future and a green cars initiative. "We are cooperating closely with the EIB on the green cars initiative. The bank will provide €4 billion of the total €5 billion package in loans." 

Commenting on the study, European Investment Bank President Philippe Maystadt said: "I am pleased that the Bank is contributing to the debate about European competitiveness ahead of the spring European Council. We are all understandably preoccupied at the moment with short-term measures to boost aggregate demand and to keep the economic wheels turning. But this study reminds us that Europe’s growth difficulties did not start with the current crisis and that we should not lose sight of our long-term challenges."