Projection of R&D-intensive enterprise growth to the year 2020: Implications for EU policy?

Pietro Moncada-Paternò-Castello and Peter Voigt

No 2012-01, JRC Working Papers on Corporate R&D and Innovation from Joint Research Centre

Abstract: The paper investigates how sector composition and the magnitude of R&D investment in the EU may differ in 2020 in comparison to the past, if a selection of top R&D-investing SMEs were assumed to be on a fast growth track while the top R&D-investing large-scale companies continue to grow as before. The background of this research objective is the emerging focus on SMEs and in particular the fast-growing among them with regard to the "Europe 2020" policy strategy. The study relies on the sample of top R&D-investing firms as given by the latest available "EU Industrial R&D Investment Scoreboard" editions, building there from an unbalanced panel. Scenarios were developed by distinguishing SMEs' assumed growth paths vs. that of large scale companies. A linear prediction model has been used to calculate the scenario simulations. Overall, the study indicates that if one expects the (R&D-intensive) small firms to be a driving force for a substantial structural change in the EU economy, from being driven by medium-tech sectors towards a high-tech based economy, it requires either a significant longer-term horizon of the assumed fast growth track than the simulated 10 years, or small firms' growth figures which even exceed the assumed annual 30% (as in the most optimistic scenario). Neither case appears to be particularly realistic. Hence, we need more top R&D investors in Europe to further intensify their engagement in R&D (increasing volume and R&D intensity) as well as numerous small firms that start and/or significantly increase their existing R&D activities and thus seek to become large firms and (global) leading R&D investors. Accordingly, a broad R&D and innovation (policy) strategy is needed with policy interventions which also target well all these options; i.e. stimulating firm growth and R&D and innovation-intensity across firm-sized classes.

Keywords: SME; company growth; industrial dynamics; structural change; R&D/ innovation policy; Barcelona target; Europe 2020 (search for similar items in EconPapers)
JEL-codes: L11 L25 O31 R38 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2012-01
New Economics Papers: this item is included in nep-cwa, nep-ent, nep-eur, nep-ino, nep-knm, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Projection of R&D-intensive enterprises' growth to the year 2020: Implications for EU policy? (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ipt:wpaper:201201

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