European industry cuts research spend by 2.6%

INDUSTRY in Europe cut its spend on research and development by 2.6% last year despite much greater drops in sales and profits.

Ireland was one of seven countries where spending by the 16 companies surveyed increased, but so did the number of industries included in the results.

And despite having factories owned by some of the world’s biggest producers of high-tech, pharmaceuticals and medical devices, very few spent money on R&D here.

Investment generally in Ireland, from the public and private sectors, falls well short of the 3% of GDP target set by the EU.

Europe lags the US and most of the rest of the world in investing in research, but Commissioner Máire Geoghegan-Quinn welcomed as a good sign the fact that the reduced spending in the EU was less than half that in the US last year.

She said the spend was against a backdrop of a much greater drop in profits for European industry of 13% compared to 1.4% for US firms, while Japan maintained their R&D spending despite an 88% fall in profits. China increased its spend by 40%.

Ireland’s poor performance in hi-tech sectors mirrors that of the EU.

The biggest spender in Ireland is US healthcare equipment giant, Covidien, up 28% to €305 million. Industrial machinery manufacturer Ingersol-Rand increased its spend by 95% to €179m.

AGI Therapeutics and pharmaceuticals halved its R&D spending to €5.7m, Bank of Ireland reduced theirs by 26% to €41m and Skillsoft software’s fell 12% to €30.5m.

Elan is the biggest indigenous investor in R&D, but cut back to €180m, while food producers Kerry maintained their spend at €148m and Greencore cut by 21% to €5.3m.


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