This month, Eurostat released the first estimates of 2013 R&D expenditures of the 28 EU member states. Also provided was a breakdown of expenditures by sector, and R&D intensity (R&D expenditure as a percentage of GDP) for each country. The report of R&D intensity is the first using the new European System of Accounts (ESA).

In September, the ESA was revised (from ESA 1995 to ESA 2010). ESA 2010 consists of updated rules, definitions and classifications that allow the economic statistics across EU countries to be compared. The new ESA corresponds to the United Nations Statistical Commission’s System of National Accounts 2008, which has begun to be used by countries worldwide. With the revision of the ESA, R&D and weapon-systems expenditures are now considered investments and contribute to GDP. Thus, GDP has increased under ESA 2010, and to meet target R&D intensities, it will be necessary for countries to increase R&D expenditure. Despite this change, according to Eurostat’s press release on the revision, growth rates are largely not affected.

Total R&D spending in the EU in 2013 was €273.5 billion ($364.7 billion = €0.75 = $1). The five EU member states with the highest R&D expenditures were Germany, France, the UK, Italy and Sweden, which accounted for 30%, 17%, 12%, 7% and 5%, respectively, of the total.

The R&D intensity of the EU overall in 2013 was 2.02%, an increase of 0.01 percentage points. Under ESA 1995, the change was a decrease of 0.06 percentage points. R&D intensities of Germany, France, the UK, Italy and Sweden (the top five countries for R&D spending) were 2.94%, 2.23%, 1.63%, 1.25% and 3.21%, respectively. The changes in 2013 R&D intensity for the countries with the highest R&D spending and the countries with the highest R&D intensity are provided in the table above, under both ESA 2010 and ESA 1995.

Under ESA 2010, R&D intensity increased in 13 EU countries in 2013 with the largest gains in Finland, Sweden, Denmark, Germany and Austria at 3.32%, 3.21%, 3.05%, 2.94% and 2.81%, respectively. R&D intensity decreased in 2013 in 10 EU countries. Ten countries had R&D intensities of less than 1%: Romania (0.39%), Cyprus (0.48%), Latvia (0.60%), Bulgaria (0.65%), Greece (0.78%), Croatia (0.81%), Slovakia (0.83%), Malta (0.85%), Poland (0.87%) and Lithuania (0.95%).

The countries with the greatest increase in R&D intensity in 2013 based on ESA 2010 were Hungary, the Czech Republic, Greece, Germany and Croatia, up 0.14, 0.12, 0.09, 0.06 and 0.06 percentage points, respectively. The countries whose R&D intensity decreased the most were Estonia, Finland, Romania, Sweden and Latvia, down 0.40, 0.11, 0.09, 0.07 and 0.06 percentage points, respectively. Current data for Ireland were not available, but based on information from 2012, R&D intensity in Ireland decreased 0.40 percentage points.

Overall, in the EU in 2013, the business enterprise, higher-education, government and private-nonprofit sectors accounted for 64%, 23%, 12% and 1% of R&D expenditure, respectively. In all but five EU countries, the sector spending the most on R&D activity was business. In Greece, Cyprus, Latvia and Lithuania, R&D spending was highest by the higher-education sector, and in Romania, expenditures were highest by the government sector.

In relative terms, the business sector accounted for the highest R&D spending in Slovenia (77%), Ireland (72% based on 2012 data), and Belgium, Hungary, Austria and Finland (each 69%). Relative R&D expenditures in higher education were highest in Cyprus (57%), Lithuania (55%), Latvia (43%), Estonia (42%) and Portugal (38%). Countries with the most relative government R&D spending were Romania (49%), Bulgaria (30%), Latvia (29%), and Greece and Poland (each 27%).

In absolute terms, spending by the business, higher- education and government sectors was highest mostly in the top five countries for overall R&D expenditures. The graph below shows spending by sector for the top five countries in each sector. The top four countries for overall R&D, Germany, France, the UK and Italy, fell within the highest absolute expenditures for each of the three sectors.

The five countries with the highest business-sector spending were Germany, France, the UK, Italy and Sweden. The five top countries for government-sector R&D spending were Germany, France, Italy, Spain and the UK. For R&D expenditures in higher education, the top five countries were Germany, France, the UK, Italy and the Netherlands.

The nonprofit sector accounted for the smallest proportion of R&D spending. Overall nonprofit R&D expenditure in the EU was €2,734 million ($3,645 million). The only countries whose nonprofit R&D spending exceeded 1% were Cyprus, Portugal, Italy and the UK, with 13%, 9%, 3% and 2%, respectively. The countries whose nonprofit sectors spent more than €15 million ($20 million) on R&D were the UK, Italy, France and Portugal, at €656 million ($875 million), €606 million ($808 million), €472 million ($629 million) and €209 million ($279 million), respectively