EU companies doubled R&D investment growth in 2022

Europe's industry significantly increased its investment in research and development in 2022, according to the 2023 edition of the EU Industrial Research & Development (R&D) Investment Scoreboard.

EU private R&D investment growth has reached the highest rate since 2015 and more than doubled compared to 2021, with 13.6% increase in 2022. In comparison, China has decreased its growth from over 25% to just over 16% and US companies slowed down from 16% to 12.6%.

The world's top 2500 R&D investors monitored by the Scoreboard set a new record for total R&D investment, reaching almost €1250 billion, €141 billion more than in 2021. Overall, US companies are responsible for over 42% of the R&D investment of the largest 2500 corporate R&D investors, while the EU and China closely compete for second place (17.5% and 17.8%, respectively).

EU stronghold in automotive, increased importance of ICT and biotech

Information and communications technology (ICT) producers, ICT services, health and automotive are responsible for more than three quarters of Scoreboard companies R&D investment.

More than a third of companies and 43% of global R&D investment come from the ICT producers and ICT services sectors, reflecting the increasing importance of digitalisation. While the ICT producers sector constitutes the largest sector in investment, the ICT services sector has been the fastest growing in the past decade.

Health constitutes more than a fifth of global R&D investment and has the most companies among the world's top R&D investors. It has increased significantly in the recent years, primarily driven by new biotech companies, coming mainly from the US. Investment by EU pharmaceutical companies has grown at a similar pace to US companies but remains around half their R&D investment level.

The EU continues to lead in R&D investments by the automotive sector (42.2%) worldwide. It is followed by Japan and the US at 19.5% each, and China at 12.8%, which has doubled its number of automotive firms in this ranking over the past decade. On the technological side, the EU leads in green high-value patenting (68%) and in clean transport technologies (29 %) closely followed by Japan and the US (27% respectively).

EU broad sectoral diversification

The EU accounts for 367 of the 2500 world top R&D investors headquartered across 17 countries, including, Poland, Slovenia, Hungary and Malta. Half of the companies are in Germany, France and the Netherlands concentrating 73% of private R&D investment in the EU.

EU sectoral distribution shows a broad representation of investors, indicating a higher degree of diversity than the US. The automotive sector accounts for 32% of R&D investments, followed by health (19.7%), ICT producers (14.4%) and ICT services (8%). R&D investors are also prominent in sectors such as aerospace, defence, financials, energy, chemicals and construction.

Among the EU top 1000 R&D investors, 18% of them are small and medium sized enterprises (SMEs), about two-third of which come from the health sector.

Constant R&D investment and sustainability

The Scoreboard for 2023 shows that companies have continued to invest in R&D in time of crises, revealing that such investment is seen as strategic to maintain competitiveness.

The crises accelerated the reduction of carbon footprints among Scoreboard companies, with European firms taking the lead in this regard. EU firms have exhibited a remarkable commitment to environmental responsibility throughout the analysed period.

Background

The EU Industrial R&D Investment Scoreboard has been published annually since 2004 – this is its 20th edition. It provides the most recent economic and financial information based on the latest published audited accounts of the world's top 2500 R&D investors, including the top 1000 EU-based ones, which have represented between 80% and 90% of global private R&D funding. Scoreboard companies are headquartered in 42 countries around the world with over one million subsidiaries.