Every additional 10 million dollars (PPP) spent on research and development result in 2 patent applications per annum in average. The implication is based on the statistics on gross domestic R&D expenditures and number of patent applications to the EPO (European Patent Office) among European countries. Strong positive correlation between these two indicators shows that the more you spend on research and development the more considerable result you get. Thus, Germany, France, UK and Italy are leading countries both by R&D spending and number of patent applications. Moreover, it is significant both current R&D expenditures and expenditures incurred in the past providing evidence that R&D expenditures have lagged effect. Although patent applications statistics cannot be regarded as a perfect proxy of the country's knowledge power (as patent application itself may turn out to be unsuccessful) it, in some measure, is positively related with the wealth of a country.
According to endogenous growth theories, innovations is one of the key drivers of economic growth. To boost innovations and technical progress, countries spend a lot of money on Research and Development. In most developed countries expenditures on research and development exceed 2% of GDP. And about 70-75% of R&D expenditures are covered by private business corporations.
Since 2008, gross domestic expenditure on R&D as a percentage of GDP has recorded a slight increase. In 2014, the value stood at 2.03% of GDP, compared with 1.85% in 2008. The increase between 2008 and 2009 during the economic crisis reflects a wider EU effort to stimulate economic growth by boosting public expenditure on R&D. In 2014, the EU was 0.97 percentage points below its target for 2020, which envisages increasing combined public and private R&D expenditure to reach 3% of GDP. Main page: Progress towards Europe 2020 headline targets
Research and Development is an activity aimed on the acquisition of new knowledgeandits practical application in the process of creation of newproductsortechnologies. R&D includes wide set of activities starting from advancing of theoretical hypothesis to development of new products. Since nowadays in businessthe major partof added valueis shifting from theproduction phaseto the development phase, the role ofR&D is growing. Besides, the competititon at the market is rapidly increasing, R&D activity can become the competitive advantage for high-tech business. The R&D resultsaffectkey decisionsin high-tech business. On the other hand, Research...