A Methodology for Estimating Public ICT R&D Expenditures in the EU

The goal of the present study is to create a methodology for measuring or estimating public ICT R&D expenditures in the EU and allow subsequently their monitoring. For this purpose, we estimate ICT share in existing disaggregated GBAORD data from the period 2004-2010 using an assumption that the share of ICT expenditures in GBAORD is similar to the share of ICT R&D employment. Labour Force Survey (LFS) is employed to calculate ICT R&D employment. In order to link GBAORD and LFS, we define a NABS-NACE correspondence table. Our estimation shows that the total EU ICT GBAORD accounts for €5.4bn (2010) and that, so far, the EU is lagging behind its Digital Agenda target.JRC.J.3-Information Societ

Foreign Ownership and Corporate Performance: The Czech Republic at EU Entry

Does foreign ownership improve corporate performance, or do foreign firms merely select more productive targets for takeover? Do workers benefit from foreign acquisitions? We answer these questions by comparing the before/after change in several performance indicators of Czech firms subject to foreign takeover after 1997, i.e., after the initial waves of privatization were completed, with the corresponding performance change of matched companies that remained domestically owned until 2005. We find that the impact of foreign investors on domestic acquisitions is significantly positive only in non-exporting manufacturing industries or those with low import penetration, while it is small in both services and manufacturing industries competing on international markets.JRC.J.3-Information Societ

R&D intensity among top R&D perfomers: Implications for policy

In this report, we look at the evolution of Europe's R&D intensity gap relative to the US and its main competitors, using data from repeated waves (2002-2010) of the Industrial Scoreboard, which collects data from top R&D performers in Europe and in the rest of the world (US, Japan, BRIC, Asian Tigers). First we decompose the R&D intensity gap into a structural and an intrinsic component and, comparing the EU to its main competitors, we find that the gap is largely structural and that Europe's position relative to any of the other four regions, has worsened during the years 2005-2006. Since then, it has slightly improved relative to Japan and especially the Asian Tigers, but it has definitely worsened relative to the US and to the BRICS. In the second part of the paper, we focus on the EU-US comparison and, using firm-level data, we confirm the structural interpretation. We also find that European young companies seem to depend much more on their internal resources for the financing of R&D when compared to US young companies. This suggests that policies directed at financing young innovative companies might play a role in closing the EU-US R&D intensity gap.JRC.J.3-Information Societ

The Top World R&D-investing Companies from the ICT Sector: A Company-level Analysis

This report analyses R&D expenditures by top R&D-investing companies from the ICT sector, for the period of 2005-2008. It focuses on the distribution of R&D investments by firms in specific ICT sub-sectors from the five main world regions, paying special attention to R&D investments by ICT companies from the EU. The relationship between R&D growth and company sales growth is also addressed. The analysis suggests that although EU ICT sector companies make very substantial R&D investments, as an aggregate they invest less in R&D than companies from the US or Japan. This is, however, not necessarily because individual US companies are more R&D intensive than EU ones but more because of the presence of a large number of top R&D-investing ICT sector companies from the US. EU companies’ R&D expenditures are concentrated in the Telecom Equipment and Telecom Services sub-sectors, whereas US, and to some extent, Japanese companies show a strong presence in IT Components, Computer Services, and Telecom Equipment. Worldwide, the most important sub-sector in terms of R&D investment is IT Components, which accounts for over one third of global R&D investments in the ICT sector. In the considered period, average R&D and sales growth rates were 16% and 14% respectively, for the sample of analyzed companies.JRC.DDG.J.4-Information Societ

Public ICT R&D funding in the European Union

The report provides a detailed analysis of the state of public expenditure on Information and Communication Technologies (ICT) Research and Development (R&D) in the European Union (EU). We also provide an interim assessment of the extent to which the Digital Agenda target about doubling public ICT R&D expenditures has been achieved. Furthermore, besides focusing on the EU, we compare these expenditures with public expenditures on ICT R&D in the EU’s main counterpart, the United States of America (US). Our analysis, covering the period 2006-2011, shows that EU ICT R&D public funding has been steadily growing. In 2011, it reached €6.1 billion which represented 6.6% of the whole public R&D funding. Regarding the comparison with the US, we conclude that the US government devotes more ICT R&D funds than all the EU Member States governments together but this gap has been shrinking and during the period 2006-2011 it decreased by 50%.JRC.J.3-Information Societ

Counterfactual impact evaluation of Public Funding of Innovation, Investment and R&D

This report uses data from Efige and from Bureau Van Dijk\u2019s Amadeus and Orbis to estimate the effect of funding from the EU and national programmes on firms\u2019 employment, sales, added value, productivity and innovativeness. It also looks at the impact of subsidies to investment and R&D (irrespective of the source of funding) on the same variables. In the first part of the report we use only the Efige dataset (covering the years 2007- 2009) and we look at (contemporaneous) correlation between public support (from national and EU sources) and product and process innovation. Our results indicate that national and EU funding are equally important in stimulating product innovation. However, EU funding has a higher correlation with process innovation. We also find a positive correlation between public support to private R&D and product innovation (but no significant correlation between the former and process innovation). On the other hand, public support to private investment (including ICT capital) is positively associated with process innovation but not with product innovation. In the second part of the report we perform a proper counterfactual analysis, where we merge the Efige dataset with the Bureau Van Dijk\u2019s Amadeus (years 2001-2012) and Orbis (2006-2012) databases. This allows us to test whether firms funded between years 2007 and 2009 have a significantly different economic performance (measured in terms of employment, sales, and value added) in the years 2009-2012, while controlling for firms characteristics measured prior to 2007 (i.e. in the pre-treatment period). Our results indicate that receiving public support from national funds generates positive increments in employment, sales and added value, compared to the counterfactual status of the absence of public intervention. We do not find evidence that EU funds have additional impacts on employment, sales or value added (relative to firms receiving only national funding or no funding). This result is most likely due to the small sample size of firms receiving EU funds, which does not allow us to precisely estimate the impact of EU funding alone or in conjunction with national funding. It is also likely to depend upon the features of EU funding, which is geared towards research that produces results over a longer time horizon than the one observable in our data. We also find that generic support to firm-level investment projects has positive impacts on employment and added value. However, no statistically significant impacts are estimated for subsidies which support R&D expenditures exclusively (possibly due to the nature of R&D support policies, which often require more time to yield noticeable impacts on general firm-level performance)

Investigation of ICT Firms' Decisions on R&D Investment

The formulation of a macroeconomic model applied to the analysis of EU Research and Development (R&D) funding strategies in Information and Communication Technology (ICT) under the PREDICT 2 project stipulates a specification of the transmission mechanism of R&D funding policy on firms' R&D expenditures. To enlighten the understanding of ICT firms' investment decisions, the effect of various firm characteristics on firms' R&D activities is analysed on a representative sample of ICT sector firms in 16 EU member countries. The analysis covers two aspects of the firms' R&D activity. Firstly, R&D engagement characterising those firms which undertake in-house R&D projects on a continuous basis, and secondly, R&D expenditure measured as the firms' in-house expenditure on R&D projects per employee. The report finds that reception of public funding is positively related to ICT firms' R&D activity. The relation between public funding and firms' R&D activity is found to depend on funding sources. The results also show that national and international diffusion of knowledge through firms' cooperation with other enterprises and through international trade plays an important role for firms R&D activity. Finally, the results suggest that substantial differences exist in firms' R&D activity across countries and sectorsJRC.J.3-Information Societ

RESEARCH OF NEW ECOLOGICAL SYNTHETIC OIL-BASED FLUID

This paper presents the evaluation of a newly developing synthetic-based hydraulic fluid MOL Farm UTTO Synt, developed by MOL Group, Hungary. The fluid was subjected to a laboratory test by using a gear hydrostatic pump UD 25, which is used in the latest Zetor Fortera tractors. During the test, flow values were statistically evaluated and graphically displayed in the form of flow characteristics and the loss of flow efficiency. On the basis of laboratory test results, it can be concluded that the newly developing fluid meets the specified requirements and it is possible to continue in testing under operating conditions

Internationalisation of ICT R&D

This report investigates the contrasting views on the process of R&D internationalisation. On the one hand, there is an abundance of anecdotal evidence of companies locating their R&D activities outside of their home countries in order to search for new sources of knowledge and locate themselves close to new markets. On the other hand, however, the levels of international patents lead one to conclude that the level of R&D internationalisation is negligible. Such discrepancies in the views on the new geography of R&D activity, together with the scarcity of data illustrating the developments in R&D activity, pose a challenge for informed policy making. This apparently contradictory evidence can be explained by the complexity of the inventive process and various motivations behind the decisions to do R&D abroad. To address these complexities related to the internationalisation of R&D, the report uses a methodology that divides the process of R&D into input and output side and, subsequently, analyses separately their levels of internationalisation. The results confirm that there is a discrepancy between them. The EU and the US have higher levels of internationalisation than Japan and Asia. However, according to which measures are taken into account, there are differences between the levels of internationalisation in the EU and the US. For example, these two regions have similar levels of R&D input internationalisation, but very different levels of R&D output internationalisation. A comparison of Japan and Asia also shows that these two regions follow different R&D internationalisation trajectories. On the one hand, these discrepancies may indicate that all regions follow different R&D internationalisation paths. On the other hand, they may also be a sign of the unequal capabilities of companies from different regions to ‘go global’.JRC.J.4-Information Societ