European Commission Press release (19 July 2005) point out that ‘The 2005 key figures show that EU R&D intensity is close to stagnation. Growth of R&D investment as a % of GDP has been slowing down since 2000 and only grew 0.2% between 2002 and 2003. Europe devotes a much lower share of its wealth to R&D than the US and Japan (1.93% of GDP in the EU in 2003, as compared to 2.59% in the US and 3.15% in Japan).
One of the reasons for this has been a slow-down in business funding of R&D. In 2002 business funding grew at a slower rate than GDP, though this was compensated for by a slightly higher growth of government funding, as well as growth in R&D financed from abroad. In 2002, business financed 55.6% of domestic R&D expenditure in the EU, compared to 63.1% in the US and 73.9% in Japan, and this share is decreasing. If the trend is not reversed, not only will the EU miss the overall target of two-thirds of R&D expenditure financed by the private sector in 2010, but the situation will have worsened.’
Source: Key figures 2005 for science, technology and innovation
The full document can be found at: www.cordis.lu/indicators/