R&D Expenditure of Major Economic Actors. Romania, Last Place in the EU
In 2021, the EU spent €328 billion on research & development (R&D), up by 6% compared with the previous year (€310 billion). Compared with 2011, there was a 43.9% increase. These rates of change are in current prices, meaning they reflect both price changes and real changes in the level of expenditure.
When looking at R&D intensity, i.e. R&D expenditure as a percentage of GDP, data show a decrease from 2.31% in 2020 to 2.27% in 2021. This fall could be explained by GDP rebound in 2021 after the significant drop in 2020 as a result of the COVID-19 pandemic. Still, compared with 2019 (2.23%), before the pandemic, R&D intensity increased by 0.04 percentage points (pp) in 2021, while compared with the previous 10 years, it increased by 0.25 pp.
R&D is a major driver of innovation, and R&D expenditure and intensity are two of the key indicators used to monitor resources devoted to science and technology worldwide.
Gross domestic expenditure on R&D (GERD) stood at €328 billion in the EU in 2021, which equated to an average of €734.5 of R&D expenditure per inhabitant. There was an increase of 6 % compared to the year before, and there was an increase of 41.5 % compared to 10 years earlier, in 2011 — note that these rates of change are in current prices and so reflect price changes as well as real changes in the level of expenditure.
In order to make figures more comparable, GERD is often expressed relative to GDP, also known as R&D intensity. Comparing with the situation before the COVID crisis, both GERD and R&D expenditure per inhabitant are now clearly higher than in 2019: the GERD in 2021 was €328 billion, while in 2019 was €312 billion; and the R&D expenditure per inhabitant in 2021 was €734.5, while in 2019 was €698.6.
Despite these increases, the EU’s R&D expenditure relative to GDP remained well below the corresponding ratios recorded in Japan (3.26 %) and the United States (3.45 %), as has been the case for a lengthy period of time. On the other hand, R&D intensity in China came closer to that of the EU in 2011-2018, and in 2019 Chinese R&D expenditure was equivalent to 2.23 % of GDP, equaling the R&D intensity of the EU in 2019. In 2020, the Chinese expenditure stood at 2.40%.
Between 2011 and 2020, R&D intensity within the Japanese economy fluctuated, with its ratio of R&D expenditure to GDP starting at 3.21 % in 2011, then ranging to 3.37 % (in 2014) and back to 3.11% in 2016 and finishing at 3.26 % in 2020. In 2011, R&D intensity in the United States was 2.76 %, with a reduction in 2012 to 2.67%. In 2013, the R&D intensity in the United States started to grow, reaching 3.45 % by 2020. China’s R&D intensity increased more rapidly than for the EU and Japan as shown in Figure 1, rising from 1.78 % in 2011 to 2.40 % by 2020, an increase of 0.62 percentage points (p.p.).
*In 2021, EU research and development expenditure relative to GDP stood at 2.27 %, lower than in the previous year when it recorded 2.31 %.
*In 2021, the EU spent €328 billion on Research and development; R&D expenditure as a percentage of GDP stood at 2.27 % in 2021, compared with 2.02 % in 2011.
*Between 2011 and 2021, most of the Research and development expenditure was performed in the business enterprise sector, rising from 1.27 % of GDP in 2011 to 1.50 % by 2021, an overall increase of 18.11 %.
Among the EU Member States, the highest R&D intensity in 2021 was recorded in Sweden (3.35%), followed by Austria (3.22%) and Belgium (3.19%). Six Member States reported R&D expenditure below 1% of their GDP in 2021. Romania (0.48%) was last, preceded by Malta (0.65%), Latvia (0.71%), Bulgaria (0.81%), Cyprus (0.89%) and Slovakia (0.95%).
Two-thirds of EU Member States reported a higher R&D intensity in 2021 than in 2011. However, the most significant decreases in R&D intensity took place in Finland (-0.64 pp), Estonia (-0.51 pp), Ireland (-0.49 pp) and Luxembourg (-0.41 pp). At the other end of the range, the biggest increases in R&D intensity between 2011 and 2021 were recorded in Belgium (+1.02 pp), Greece (+0.76 pp), Poland (+0.69 pp), Austria (+0.55 pp) and Croatia (+0.53 pp).
When we look at R&D expenditure by sector in the EU, the business enterprise sector continued to account for the largest share of the R&D (66.08% of total R&D disbursed in 2021), followed by the higher education sector (21.58%), the government sector (11.89%) and the private non-profit sector (0.44%).