Software companies splash the cash on R&D as Europe's research budget grows

European IT services and software companies are planning to increase their spending on R&D by almost double the EU average over the next three years.
Written by Jo Best, Contributor

Businesses across Europe are planning to bump up the money they put into research and development over the next three years, with some tech sectors predicting an above-average rise in R&D spending.

R&D budgets among companies in the EU will increase by four percent between 2012 and 2014, according to a survey (PDF) released on Wednesday by the European Commission.

Although the figure is down slightly on last year's five-percent growth, it is double 2009's growth — a sign that businesses are once again becoming willing to finance R&D projects.  

"These expectations indicate a positive and stable trend for R&D investment growth as observed before the 2008 economic and financial crises," the Commission said. Spending isn't quite up to pre-crash levels, when companies were predicting seven-percent growth in R&D spending.

Tech companies are among those ready to reinvigorate their R&D the most. Software and IT services businesses are ahead of the European average — intending to raise their R&D budgets by 11 percent between 2012 and 2014.

Tech hardware and equipment firms, however, are planning a 3.5-percent increase, while fixed-line telecoms businesses are forecasting growth of 2.5 percent.

According to the Commission, respondents to the survey had an average of 134 agreements with other companies regarding collaboration in R&D.

"The fixed-line telecommunications sector (medium R&D intensity) stands out, with over 800 R&D collaboration agreements with other companies, followed by technology hardware & equipment and pharmaceuticals & biotechnology (high R&D intensity) with more than 200 agreements," the EC said.

The survey also found Germany to be the most popular destination for outsourced R&D, followed by the US, India and China.

However, the US was cited as the preferred country for companies to get new intellectual property, whether by acquisition or licensing. Germany and Japan were in second and third place, respectively.

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