Does Europe perform too little corporate R&D? A comparison of EU and non-EU corporate R&D performance

• Published in: Research policy Vol. 39; no. 4; pp. 523 - 536
• Main Authors: Moncada-Paternò-Castello, Pietro, Ciupagea, Constantin, Smith, Keith, Tübke, Alexander, Tubbs, Mike
• Format: Journal Article
• Language: English
• Published: Amsterdam Elsevier B.V 01.05.2010; Elsevier; Elsevier Sequoia S.A
• Series: Research Policy
• Subjects: Corporate R&D investment; Corporate R&D investment R&D indicators Decomposition of R&D intensity Firms' demographics EU R&D deficit; Decomposition of R&D intensity; Economic structure; Enterprises; EU R&D deficit; Europe; European Union; Firms’ demographics; Information and communication technologies; Innovation; International comparisons; Private sector; R&D; R&D indicators; Research & development; Research and development; Studies; United States > US; Europe; O57; Firms’ demographics; O38; EU R&D deficit; Corporate R&D investment; O30; O32; R&D indicators; Decomposition of R&D intensity
• ISSN: 0048-7333; 1873-7625
• DOI: 10.1016/j.respol.2010.02.012

This paper examines whether there are significant differences in private R&D investment performance between the EU and the US and, if so, why. The study is based on data from the 2008 EU Industrial R&D Investment Scoreboard. The investigation assesses the effects of three very distinct factors that can determine the relative size of the overall R&D intensities of the two economies: these are the influence of sector composition ( structural effect) vis-à-vis the intensity of R&D in each sector ( intrinsic effect) and company demographics. The paper finds that the lower overall corporate R&D intensity for the EU is the result of sector specialisation ( structural effect) – the US has a stronger sectoral specialisation in the high R&D intensity (especially ICT-related) sectors than the EU does, and also has a much larger population of R&D investing firms within these sectors. Since aggregate R&D indicators are so closely dependent on industrial structures, many of the debates and claims about differences in comparative R&D performance are in effect about industrial structure rather than sectoral R&D performance. These have complex policy implications that are discussed in the closing section.