The EU is continuing its focus on maintaining its position as a top ranking R&D region. According to Eurostat, the UK, Germany and France were responsible for approximately 60% of total R&D expenditure in the EU in 2006. For that year, 1.84% of the EU’s GDP, €212 billion ($265 billion), was spent on R&D. The 2006 R&D expenditures for Germany and France were €58 billion ($72.5 billion) and €38 billion ($47.5 billion), respectively. The UK’s R&D figure was unavailable for 2006, but in 2005, the country spent €32 billion ($40 billion) on R&D. In this article, IBO examines some of the current R&D issues affecting the EU, the UK and Germany.

On March 11, the EU Parliament approved a plan to build the European Institute of Innovation and Technology (EIIT). To be jointly funded by private and public sources, the EIIT will require an estimated €2.4 billion ($3.3 billion to operate in its first six years. The EU has allocated €308.7 million ($422.9 million) in funding for 2007–2013. The EIIT will fund projects involving higher education institutions, research organizations and companies in what will be called Knowledge and Innovation Communities (KICs). The KICs will be composed of at least three organizations, with a minimum of one institute of higher education and one private company. Climate change and renewable energy are expected to be among the KIC’s first projects. Members of the EIIT’s governing board will be chosen by June.

The European Commission (EC) has teamed up with the European Federation of Pharmaceutical Industries and Associations in a €2 billion ($2.7 billion) partnership dubbed the Innovative Medicine Initiative (IMI). The IMI is designed to improve the development of medicines and to make the EU more competitive. The EC will contribute €1 billion ($1.4 billion), which will be matched by biopharmaceutical companies. EC funding is expected to begin at around €100 million ($137 million) per year and gradually increase to €300 million ($411 million) per year by 2013. By forming a nonprofit organization, the IMI will fund research conducted by partnerships between biopharmaceutical firms, public institutions and small- and medium-sized companies. The first round of research projects are set to begin in November. The IMI’s latest research agenda, published in February, specifies four strategic areas: predictivity of safety evaluation, predictivity of efficacy evaluation, knowledge management and education and training.

In the UK, government relations with pharmaceutical companies have not been so cordial lately. A survey by the Confederation of British Industry and the Association of the British Pharmaceutical Industry of 101 pharmaceutical companies show that 35% of respondents expect to cut their investment in UK R&D, which currently totals £4 billion annually ($8 million), while 46% plan reduce the number of clinical trials conducted in the country. The survey cited an unprecedented call from the government to renegotiate the Pharmaceutical Price Regulation Scheme, which is currently in midcontract, as a major factor in this shift.

R&D spending by the German government continues to increase. German R&D spending is expected to rise 7.85% to €9.187 billion ($12.585 billion) by the end of 2008, according to the German Federal Ministry of Education and Research (BMBF) and the Stifterverband. In 2008, the BMBF will operate with a budget of €3.5 billion ($4.8 billion), including €580 million ($794.5 million) for research spending. R&D for climate, ecological and energy research is expected to receive a 16% increase to €336 million ($460.3 million), while the budgets for life sciences and “new instruments for knowledge and technology transfer” are expected to increase to €400 million ($548 million) and €76 million ($104.1 million), respectively. The BMBF’s funding for basic research and natural sciences are estimated to rise 1.6% to €181.9 million ($249.2 million). Funding for Higher Education Pact grants, which are funded through the German Research Foundation, are expected to increase 20% between 2007 and 2010.