With the large number of European Union member states, Europe’s research community is diverse in its economic composition and national interests, while central funding and administrative mechanisms allow coordinated operation of public research at a scale that is comparable to that of the United States. There also are parallels in research priorities (like the level of commitment to basic research), demographics and research productivity.

Economic conditions heavily influence R&D funding; so struggling EU member states Greece, Spain and Italy influence this 2014 R&D forecast, offset by recovery in Germany, France and the U.K. The EU is the only global region that had negative growth in 2013, and it is projected to grow at only about 1% per year through 2017. R&D funding is expected to follow a similar track.

Highlights of the European research enterprise and its economic context include:

The amount of R&D performed in Europe is essentially flat for 2012, 2013 and 2014.

The R&D-focused Eighth Framework Programme is projected to increase nearly 60% to $110 billion over FP7.

Performance of U.S. academic research institutions rank just above those in Europe, although European universities are well-regarded in global standings.

Survey results indicate that U.S. applied research is viewed more favorably than Europe, but that basic research efforts are close to parity.

Outlook

Like the United States, Europe deploys a portion of R&D investment to Asia.

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Europe and the U.S. continue to dominate the top positions in WIPO’s Global Innovation Index..

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Source: World Intellectual Property Org.

Expectations for change are similar in nearly all research domains for U.S. and European researchers (1-5 scale).

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Source: Battelle and R&D Magazine

In the second quarter of 2013, the EU emerged from six consecutive quarters of economic contraction, ending the longest economic contraction on record for the EU The rebound was driven by the EU’s largest economy, Germany, where output grew by 0.7% for the quarter. Most European countries are forecast to experience economic growth of about 1% through 2014, although Eastern European countries could see GDP (and related R&D) growth rates in the 1% to 2% range. Germany is expected to see 1.4% GDP growth in 2014 and commensurate R&D growth over 2013. France and the United Kingdom are also gaining economic momentum, according to the most recent report by the Organization for Economic Cooperation and Development (OECD).

The EU’s Framework Programme for Research and Technological Development (FP8) is scheduled to be renewed for the eighth time in 2014 since the popular program began in 1984. FP8 (also called Horizon 2020) is anticipated to run from 2014 through 2020, and will be funded to $110 billion (i.e., $15.7 billion/yr). This represents a 58% increase over FP7, which ran from 2007 to 2013 and was funded to $70 billion. FP8 funding will provide $42 billion for research on climate change, renewable energy, food safety and aging. $23 billion will be dedicated to industrial leadership in innovation, including increased access to capital and support for small-to-medium enterprises.

A dedicated budget of $34 billion will focus on top-level research supported by the European Research Council, the EU’s equivalent to the U.S.’s National Research Council. While representing less than 5% of the EU’s total forecast R&D investment in 2014 of $351 billion, the high-profile research is dedicated to creating new growth and jobs in Europe. It also emphasizes the translation from scientific research to commercialization to economic impact by helping innovative enterprises develop technological assets into viable products with large commercial potential. This market-driven approach includes creating partnerships with the private sector and member states.

In their responses to the Battelle/R&D Magazine survey, global researchers anticipate positive changes in European research priorities over the next 10 years, including (in priority order) focus on energy, environmental and life science R&D applications. Areas that may become less emphasized include military and space-based research.

In the aggregate, R&D expenditures in Europe are expected to increase 0.7% in 2014. Europe’s share of global R&D spending will drop to 21.7%, while Asia’s rises to 39% in 2014 from 38% in 2013.

Academia's Important Role As in the U.S., an important portion of research activity will be conducted by academia. European universities place second only to U.S. universities in the latest Times Higher Education World Rankings, with about 71 European universities ranked in the Top 400, compared to 77 U.S. universities. THE rankings are based on 13 performance indicators in areas involving teaching, research, knowledge transfer and global outlook. The U.K. had the largest number of European universities in the top 400 list with 29.

In Their Own Words

Comment from the Battelle/R&D Magazine Global Researcher Survey

The most important challenge facing the global research community is ensuring that populations regard its contributions as positive, responsible and legitimate. R&D policy is not just about throwing money at scientists and engineers - it is also about ensuring that their innovations can be brought into use, which is a quite different challenge. - Domestic Corporation/U.K.