European Research Lagging Although Corporate R&D Grew in 2008

European companies are laggards in spending on research and development—but a new report offers a few upward trends. E.U. companies' R&D grew by 8.1% in 2008, ahead of the United States (5.7% growth) and Japan (4.4%) according to the EU Industrial R&D Investment Scoreboard, an annual list compiled by the European Commission. Although the United States still spends more in the sectors that depend most on R&D (pharma, biotech, and information and communication technology), Europe is leading in the up-and-coming alternative energy sector.

The most impressive statistics don't come from the European Union or the United States, however, but from China, where corporate R&D grew by 40% last year, and from India, with 27.3% growth.

Some caveats are in order when reading the Scoreboard.

Many of the big, private R&D spenders are international companies with labs in multiple countries. The study assigns all of their R&D to their home country, based on where their head offices are.

Worldwide, corporate R&D spending grew by 6.9% in 2008, down from 9.0% the previous year. The current economic crisis is likely to slow down growth in R&D even further in 2009 and 2010, European Commissioner for research Janez Potočnik warned today at a press conference in Brussels.

Heading the big, private R&D spenders is Toyota, with €7.6 billion in investments—although its jump from 5th place the year before is partly explained by the rise in the yen's value. The rest of the top-10 includes 5 U.S. companies (Microsoft, GM, Pfizer, and Johnson and Johnson) and 4 from Europe (Volkswagen, Nokia, Roche, and Novartis.)