Europe's IT Gap with U.S. Widens, EU Says

Despite European efforts to catch up with the U.S.'s technological performance, the gap is widening, according to a summary of the European Commission's 1997 report on 'Science and Technology Indicators,' published Tuesday.

Despite European efforts to catch up with the U.S.'s technological performance, the gap is widening, according to a summary of the European Commission's 1997 report on "Science and Technology Indicators," published Tuesday.

"Europeans are not investing enough in their future," Research Commissioner Edith Cresson said in a printed statement.

The report, the second of its kind, illustrates how the European Union is unable to catch up with its main competitors on the global market, despite its efforts to increase spending on joint research and development projects, improve education opportunities and encourage life-long learning.

The report comes at a crucial time in deliberations over research and development programs.

In February European research ministers approved ECU 14 billion ($15.4 billion) in spending on research through 2002, slashing more than ECU 2 billion from the original Commission proposal.

The funding is now awaiting approval by the European Parliament, which will undoubtedly reinstate many of the cuts, and the Commission hopes that this report will prompt ministers to go along with these increases when the program comes back for formal adoption before midyear.

One of the most troubling findings in the report is that the strong growth of the American economy in recent years was preceded by a spectacular improvement in technological innovation from 1987 onward due to significant public and private investment in research and innovation.

The study found a similar cause and effect in Japan at the beginning of the 1990s.

In comparison, investments by European governments and industry in Europe's technological base have stagnated. From 1980 to 1996 on average the EU invested only 1.8 percent of its gross domestic product (GDP) in research and development, compared with an average 2.5 percent in the U.S. and 2.8 percent in Japan.

Korea, Singapore and Taiwan also outpaced the EU with an average 2.2 percent of their GDP going to research, according to the report.

Some EU member states do exceed the average. Sweden has led the world in overall research spending with an average 3.5 percent of GDP going to research, and France, Germany, the U.K. and the Netherlands are still in the top 10 nations in terms of overall research investments.

The report compares the performance of 50 nations. Regarding investment in education, the report shows that while the EU's public expenditure stands at an average 5.4 percent of GDP, higher than the Asian average of 4.6 percent, it still is below spending in the U.S., Australia, New Zealand and Israel. The summary does not provide a figure for these latter countries.

In measuring a country's technological performance, the report also looks at the number of patents filed. European countries account for 48 percent of the patents applied for at the European Patent Office, 6 percent of the patents at the Japanese Patent Office and 18 percent of those at the U.S. Patent and Trademark Office.

The report states that the EU is relatively weak in patents for several key sectors, notably audio-visual, telecommunications, computers, electronics and instruments. However, it is in the top position in environmental and transport technologies as well as materials and industrial processes.

This year the report also points to what it labels the new European paradox, that while Europe's exports of high-tech goods are growing rapidly, it benefits from only a rather moderate technological return on investment. Technological return is measured by the number of patents divided by expenditure on business R&D.

The EU return falls well below that of the U.S. and Japan in terms of U.S. patents but above the U.S. and Japan in European patents. Among member states, Denmark, Finland and the Netherlands boast high returns, while Belgium, Greece, Spain, Sweden and the U.K. have high scientific output, but below average technological returns on investment.

Despite the meager results, the importance of European joint research spending is growing, and the report says that the EU's multiannual framework programs have "gradually become the principal driving force behind scientific and technological cooperation in Europe."

EU funding represented 16.2 percent of total government expenditure for the EU in 1995, compared to 6.2 percent in 1985. In 1995 EU spending stood at roughly ECU 2 billion.

Between 1990 and 1996 more than 200,000 cooperative links were established between enterprises, universities and research centers, of which 90 percent involved institutions from different member states.

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