Investment in R&D is experiencing the biggest increase since 2008, exceeding 17,000 million euros |  Economy

Investment in R&D is experiencing the biggest increase since 2008, exceeding 17,000 million euros | Economy

As can be seen from the data released by INE this Thursday, investment in R&D increased by 9.4% to €17,249 million in 2021. The largest annual increase since 2008, where it rose 10% and was well above the investment level of 2019 (€15,572 million) and 2010 (€14,588 million). However, they warn from the COTEC Foundation, which specializes in innovation, that the increase in investment is still “not enough” to reach 35,000m euros. Science, Technology and Innovation Strategy was created for R&D investment rate.

COTEC also underlines that the increase is related to the increase in nominal GDP and not so much from the increase in the weight of R&D in the Spanish productive structure, that is, in the ratio of R&D to GDP. Specifically, the rate remained at 1.41% of GDP in 2020 and rose just two percent to 1.43% in 2021. Achieving 2.12% of the investment set for 2027 is far from reaching the target of 2.12%. in research and development on gross domestic product.

According to Cotec, Europe’s Next Generation EU funds have a lot to do with the biggest investment, making the 2021 increase “outstanding”. This fact causes the Specialized Foundation to identify the need to seek national and alternative sources to replace funds and track rising investment levels. The Foundation estimates that the average annual growth rate in R&D investments should be at least 12.7% in order to reach the target set by the Government.

Increasing investment in companies and public administration

Data includes investments from the public and business sectors, including public and private sector companies. Public administrations and universities increased their investments by 7.8%, and companies by 10.7% (more than 10% faster than the 0.3% recorded in the pandemic year).

In euro terms, the public sector invested 7.497 million and the business sector 9.752 million. By adding 640 new companies to the number of companies operating in R&D, a total of 11,828 companies were reached in 2021.

However, they stress from Cotec that, unlike before the crisis, a process of investment concentration was observed: “The business sector invested 20.4% more in 2021 than in 2008, but 3,221 companies did it less”. The Foundation confirms that SMEs are the most affected by the decline in innovation. This contrasts with the 2.6% increase in the number of large firms engaged in R&D activities.

more employment

Recruitment also increases. The total number of people employed full-time in innovation and development-related activities is 249,647, 17,879 more than in 2020. The public sector added 5,890 personnel to the 132,375 people recruited in 2021, and the business sector added 11,989 to the 117,273 employees.

Equality is ensured in the public sector, where the male-female ratio is almost 50%. However, approximately 70% of the employees in the private sector are men and 31.2% are women.

Engine, aerospace and energy, major sectors of innovation

The Cotec report highlights that 13 of the 30 sectors for which statistics are collected have already exceeded their investment levels before the financial crisis. Experts highlight the motor vehicles sector, which has increased its commitment to innovation by 176%. aerospace construction (61%) and energy and water (61%). Among the other 17 sectors that have not yet recovered their investment, the decline in investments in leather and footwear (-70%), construction (-59%) and clothing (-58%) draws attention.

Investing in R&D has proven to be a factor of economic growth, According to Cotec. The seven branches that invested the most in R&D in 2021 had high growth rates in the entire period examined. On the contrary, negative double-digit growth rates are seen in all business lines (6 out of 7) that invest the least in R&D.

Regarding how the allocation of funds for innovation and development in Spain is distributed by region, the Foundation confirms that in 2021 there are nine regions that exceeded the level of both investment and employment before the 2008 crisis (Madrid, Country Basque Country, Catalonia, Valencia, Murcia, Castilla la Mancha , Castilla y León, Galicia and the Balearic Islands); four regions (Asturias, Canarias, Cantabria and La Rioja) that failed to improve neither investment nor employment levels; two regions that improved employment but did not provide investment (Andalusia and Extremadura) and two regions that improved investment but did not provide employment (Navarre and Aragon).

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