This month, Eurostat released its annual yearbook, which included data on R&D expenditure and personnel for the continent from 2004 to 2013. The figures showed growth in both investment in R&D and the numbers of researchers over the years covered, and provided information on researcher numbers and R&D expenditures by sector. The data suggest that R&D spending and the numbers of researchers in European countries are beginning to recover from the recession, whose impacts were clearly reflected in 2009 R&D data.

In 2013, the gross expenditure on R&D (GERD) by European countries increased modestly. Of 32 European countries for which numbers were reported (excluding Iceland, Ireland and Switzerland, for which 2013 data were not available), GERD totaled €299.1 billion ($398.8 billion = €0.75 = $1). Excluding these same countries as well as Montenegro, for which 2012 GERD was not presented, GERD increased 0.8% in 2013.

European investment in R&D was dominated by a handful of countries. In 2013, the five countries with the highest GERD were Germany, France, the UK, Italy and Russia, whose R&D spending increased 1.3%, 1.3%, -1.6%, -1.5% and 1.0%, respectively. These five countries accounted for almost two-thirds of total R&D investments by European countries, as reflected in the first pie chart on page 3.

The modest R&D spending in 2013 was preceded by year-on-year growth in the mid-single digits from 2010 through 2012. As shown in the line graph below, year-on-year changes in R&D spending in Europe (excluding Iceland, Ireland, Montenegro, Serbia and Switzerland, for which data for some years were not available) were all positive from 2005 to 2013 except for 2009, when GERD dropped 1.4%, coinciding with European countries’ 2008–09 recession. In 2009, 18 of these countries showed negative year-on-year growth, whereas the average number of countries showing declines in GERD each year from 2009 to 2013 was 5. Prior to the drop in R&D investment in 2009, beginning in 2005, GERD had grown consistently in the mid- to high double digits.

Showing a relatively strong recovery from the 2009 decline in GERD, 2010 R&D expenditures of European countries (excluding Iceland, Ireland, Montenegro, Serbia and Switzerland, for which data for some years were not available) grew 5.2%, with only six countries experiencing declines in GERD. The compound annual growth rate (CAGR) of GERD of this group of countries reflects the beginning of recovery from the recession in 2009. CAGR from 2004 to 2008 was 4.9% and from 2009 to 2013 was 4.1%. Together with year-on-year growth figures, the CAGR data suggest that R&D in Europe has been recovering from the recession, although it has not reached the level of growth prior to it.

Although also affected by the recession, the numbers of researchers in Europe, measured in full-time equivalents (FTEs), fluctuated considerably less than investment in R&D in 2013. The number of FTEs in European countries in 2013 (excluding Iceland, Ireland, Montenegro and Switzerland, for which data from both years were not available) ranged from 404 in Montenegro to more than 400,000 in Russia, totaling almost 2.3 million altogether. At 2.4%, FTEs grew more quickly than GERD in 2013.

Similarly to GERD, a relatively small number of countries had the majority of FTEs in 2013. The five European countries with the highest FTEs were Russia, Germany, France, the UK and Spain. As the pie chart above shows, three-fifths of FTEs in Europe were from these countries combined.

Overall, year-on-year FTE growth from 2005 to 2013 followed a similar trend as changes in GERD, although the percentage changes were generally smaller. Changes in FTEs over this time period for European countries (excluding Greece, Iceland, Ireland, Macedonia, Montenegro, Serbia and Switzerland, for which FTE data for each year were not available) are shown in the first line graph on page 3 along with changes in GERD. FTEs in 2004 for the UK were not reported, but because it is among the top five countries in terms of numbers of researchers, year-on-year change was calculated both with (for 2005–13) and without it. As shown in the graph, changes in FTEs, both including and excluding the UK, qualitatively followed a similar pattern to GERD, with 2011 as an exception. In that year, despite GERD growth of 5.7%, FTE growth slowed to roughly 2%. However, in 2009, the number of FTEs continued to grow, albeit more slowly, whereas GERD dropped.

Another indicator of the effect of the recession on researcher numbers is FTE CAGRs. The FTE 2009–13 CAGRs of the five European countries with the highest FTEs are provided in the table above along with their numbers of researchers and year-on-year change in FTEs.

Overall 2009–13 CAGR in FTE for all European countries reporting data for these years (excluding Greece, Iceland, Ireland, Macedonia, Montenegro and Switzerland, for which data were not available) was 2.3%. Excluding the UK as well as Serbia, for which 2004–08 CAGR FTE data could not be calculated, 2009–13 CAGR for FTEs in Europe was 3.1%. For these same countries, 2004–08 CAGR was 3.0%, which suggests that, in terms of researcher numbers, European countries have recovered from the recession. The year-on-year percentage changes in FTEs were 1.3% from 2008 to 2009 excluding the UK and 1.4% including it.

European countries experienced both double-digit growth and declines in FTEs during the period following the recession. The five countries with the highest FTE CAGR 2009–13 were Malta, Moldova, Turkey, the Netherlands and Sweden, at 15.5%, 11.9%, 11.4%, 11.4% and 7.2%, respectively. But six countries experienced negative FTE CAGR over that time period: Russia, Romania, Finland, Croatia and Spain, at -0.1%, -0.7%, -1.0%, -1.5% and -2.0%, respectively.

Providing additional insight into European spending on R&D from 2004 to 2013 is investment by sector. Most but not all sectors followed similar trends to GERD or FTEs over these years. The sector with the highest R&D investment in 2013 was business enterprise at 63% of the total. The government, higher education and private nonprofit sectors followed, at 13%, 23% and 0.8%, respectively (excluding Greece, Iceland, Ireland, Montenegro, Serbia and Switzerland, for which complete data were not available). The second line graph on page 3 shows year-on-year percentage changes of GERD by sector from 2005 to 2013. Notably, despite an overall slowing in growth of GERD in 2009 as well as in all other sectors, growth in the private nonprofit sector increased slightly. In 2011, growth in the business sector expanded, while it slowed in the other sectors.

The percentages of GERD for each sector in 2013 for various sets of countries are presented in the tables on page 8 and this page. The countries in these tables are those with the highest GERD, the highest FTE and the highest FTE CAGR. Because sector data were not available for Macedonia, it has been replaced by Hungary in the bottom table of countries with the highest FTE CAGRs in 2013. In all cases, the highest R&D investments were overwhelmingly from the business enterprise sector, while private nonprofits had the lowest. Higher education and government investment varied by country.

CAGR for R&D in all sectors was lower after the recession, from 2009 to 2013, than before it, from 2004 to 2008. The business enterprise sector’s 2004–08 CAGR in GERD was 6.0%. After a 2008–09 drop in GERD of 3.9%, its 2009–13 CAGR was 4.8%. The government sector’s 2004–08 CAGR was 6.0%, while its 2009–13 CAGR was 2.9%. The government’s GERD rose 2.1% in 2009. Higher education experienced 6.3% CAGR in GERD in 2004–08. GERD CAGR from 2009 to 2013 was 0.35%, and it rose 3.4% in 2009. The private nonprofit sector showed the most volatility over the years included in the report. GERD CAGR dropped from 9.0% in 2004–08 to -0.7% in 2009–13. GERD in the sector increased 1.0% in 2009.