June 6, 2012

The countries of southern Europe require growth, not least in order to rein in their debt on a long-term basis. Besides conducting structural reforms and privatisations they need to improve the conditions for innovative activity, increase the number of business start-ups and promote the growth of high-tech companies. Across Europe it can be seen that not only countries such as Greece and Portugal but also Italy and Spain provide a considerably poorer environment for innovation than the EU-27 average. This is documented by the Innovation Union Scoreboard recently released by the European Commission. The Scoreboard evaluates 24 individual indicators and, among other things, analyses research and development (R&D) expenditure in the business sector. In Italy, Spain and Portugal business R&D expenditure totalled only 0.7% of GDP in 2010, while in Greece it was a meagre 0.2% (2007). Not only Portugal – in particular – but also Spain had managed to boost the level of business expenditure on R&D between the turn of the millennium and the beginning of the financial crisis (by 0.4 and 0.2 percentage points, respectively). By contrast, Greece and Italy posted virtually no such growth up to 2007.

R&D expenditures reflect a country’s economic structure: in Greece and Portugal, in particular, traditional industries and services (such as the textile industry in Portugal and the tourism industry in Greece) are economic heavyweights; they are not research-intensive, however. Nevertheless, there is much to be done. First of all, research and development are the job of businesses themselves. However, politics can play a supporting role, e.g. by developing technology centres, promoting corporate networking and establishing university and/or non-university research facilities. The development of institutions that work in the area of application-oriented R&D is also a high-priority task. These tasks should already be on the political agenda today, so that they can strengthen the underlying framework for innovation and growth going forward.

See also:
Greece, Ireland, Portugal: More growth via innovation
EU Monitor No. 89, January 27, 2012