Business R&D in the ICT sector: examining the European ICT R&D deficit

Sven Lindmark, Geomina Turlea and Martin Ulbrich

Science and Public Policy, 2010, vol. 37, issue 6, 413-428

Abstract: Two data sets are contrasted: country-level data (R&D performed by business in a particular sector and country (BERD) and company-level data (R&D financed by a particular company regardless where R&D investment is performed). About half of the overall EU vs. US R&D gap is in the information and communications technologies (ICT) sector. In turn, this ICT R&D gap has two faces. Country data suggest that the gap is largely intrinsic: the EU displays lower R&D intensities in several sub-sectors, while ICT sector size and composition are quite similar. On the other hand, company data suggest that the gap is instead structural: the sector size and composition of sub-sectors differ greatly, while R&D intensities are similar. One major explanatory factor lies in international flows of R&D and value added. Companies tend to allocate a larger share of their value added and a smaller share of R&D outside their home markets. In the sub-sectors which include much larger and more numerous US companies, these flows are unbalanced, and (BERD) R&D intensities are thus higher in the US than in Europe, everything else being equal. Copyright , Beech Tree Publishing.

Date: 2010
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