Cyprus increases R and D spending to 0.5% in ten years, but still lags behind, says Eurostat

Cyprus and other nine member states of the European Union recorded low Research and Development, according to data released today by Eurostat.

Cyprus spent 0.5% of its GDP, or 92 million euro for R and D in 2016, an increase since 2006 (it was 0.38% or 62 million euro) and is placed 25th among the EU28. Eurostat published that 10 states are currently below 1%: Latvia (0.44%), Romania (0.48%), Cyprus (0.50%), Malta (0.61%), Lithuania (0.74%), Bulgaria (0.78%), Slovakia (0.79%), Croatia (0.84%), Poland (0.97%) and Greece (0.99%).

In 2016, the Member States of the European Union (EU) spent all together over Euros 300 billion on Research and Development (R and D). The R and D intensity, (i.e) R and D expenditure as a percentage of GDP, remained stable at 2.03% in 2016. Ten years ago (2006), R and D intensity was 1.76%.

With respect to other major economies, R and D intensity in the EU was much lower than in South Korea (4.23% in 2015), Japan (3.29% in 2015) and the United States (2.79% in 2015), while it was about the same level as in China (2.07% in 2015) and much higher than in Russia (1.10% in 2015) and Turkey (0.88% in 2015). In order to provide a stimulus to the EU’s competitiveness, an increase by 2020 of the R and D intensity to 3% in the EU is one of the five headline targets of the Europe 2020 strategy.

The business enterprise sector continues to be the main sector in which R and D expenditure was spent, accounting for 65% of total R and D conducted in 2016, followed by the higher education sector (23%), the government sector (112%) and the private non-profit sector (1%).

In 2016, the highest R and D intensities were recorded in Sweden (3.25%) and Austria (3.09%), both with R and D expenditure above 3% of GDP. They were closely followed by Germany (2.94%), Denmark (2.87%) and Finland (2.75%). Belgium (2.49%), France (2.22% in 2015), the Netherlands (2.03%) and Slovenia (2.00%) registered R and D expenditure between 2.0% and 2.5% of GDP.

Over the last ten years, R and D intensity rose in twenty-two Member States, with the highest increases in Austria (from 2.36% in 2006 to 3.09% in 2016, or +0.73 percentage points – pp) and Belgium (+0.68 pp). Conversely, R and D intensity decreased in six Member States and most strongly in Finland (from 3.34% in 2006 to 2.75% in 2016, or -0.59 pp) and Luxembourg (-0.43 pp).

The main sector in which R and D was performed in 2016 was the business enterprise sector in all Member States, except Cyprus, Latvia and Lithuania (where the higher education sector was the dominant performing sector). The highest shares of R and D expenditure performed in the business sector were observed in Slovenia (76%), Hungary (74%), Bulgaria (73%), Ireland and Austria (both 71%), Belgium and Sweden (both 70%) as well as Germany (68%). Over the past ten years, the share of R and D conducted in the business enterprise sector increased in twenty Member States, while it decreased in eight.

For the government sector, the highest shares were registered in Romania (33%), Latvia (32%) and Luxembourg (30%). The highest shares of R and D conducted within the higher education sector were recorded in Lithuania and Portugal (both 45%), Latvia (44%) and Cyprus (42%).

Source: Cyprus News Agency