Despite an increase in its R&D spending, Cyprus still has one of the EU’s lowest scores in R&D intensity, Eurostat figures showed recently.
It said that in 2017, EU member states spent almost €320 billion on R&D. The R&D intensity, i.e. R&D expenditure as a percentage of GDP, stood at 2.07% in 2017, compared with 2.04% in 2016. Ten years earlier (2007), R&D intensity was 1.77%.
Cyprus spent €109 million on R&D (€70m in 2007) and increased its R&D intensity to 0.56% of GDP (from 0.4% in 2007). This is the fourth lowest score in the EU and puts Cyprus in the group of eight EU countries with spending below 1% of GDP.
With respect to other major economies, R&D intensity in the EU was much lower than in South Korea (4.22% in 2015), Japan (3.28% in 2015) and the United States (2.76% in 2015), while it was at about the same level as in China (2.06% in 2015) and much higher than in Russia (1.1% in 2015) and Turkey (0.96%).
In order to provide a stimulus to the EU’s competitiveness, an increase by 2020 of the R&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&D expenditure was spent, accounting for 66% of total R&D disbursed in 2017, followed by the higher education sector (22%), the government sector (11%) and the private non-profit sector (1%).
In 2017, the highest R&D intensities were recorded in Sweden (3.33%) and Austria (3.16%), followed by Denmark (3.06%) and Germany (3.02%), all with R&D expenditure above 3% of GDP, whilst Finland (2.76%), Belgium (2.58%) and France (2.25% in 2016) registered R&D expenditure between 2.0% and 3.0% of GDP.
At the opposite end of the scale, eight Member States recorded a R&D intensity below 1%: Romania (0.5%), Latvia (0.51%), Malta (0.55%), Cyprus (0.56%), Bulgaria (0.75%), Croatia (0.86%), Lithuania and Slovakia (both 0.88%).
Over the last ten years, R&D intensity rose in 21 Member States, with the highest increases in Austria (from 2.42% in 2007 to 3.16% in 2017, or +0.74 percentage points – pp) and Belgium (from 1.84% in 2007 to 2.58% in 2017, or +0.74 pp). Conversely, R&D intensity decreased in six Member States and most strongly in Finland (-0.59 pp) and Luxembourg (-0.33 pp). In Malta, R&D intensity remained at the level of 0.55%.
The main sector in which R&D was performed in 2017 was the business enterprise sector in all Member States, except Cyprus and Latvia (where the higher education sector was the dominant performing sector) and Lithuania (where the share of higher education sector was the same as of business enterprise sector).
The highest shares of R&D expenditure performed in the business enterprise sector were observed in Slovenia (75%), Hungary (73%), Ireland and Sweden (both 71%), Bulgaria and Austria (both 70%), Germany (69%), Belgium and the United Kingdom (both 68%).
For the government sector, the highest shares were registered in Romania (32%), Lithuania (28%), Luxembourg and Latvia (both 26%). The highest shares of R&D conducted within the higher education sector were recorded in Latvia (47%), Portugal (43%), Cyprus (42%) and Estonia (40%).