EIB Investment Report 2017 reveals urgent need for more investment in R&D
The European Investment Bank (EIB) has recently published its EIB Investment Report 2017/2018. The report is based on the results of the annual EIB Investment Survey (EIBIS) of 12,500 businesses in the EU, which this year also included a Europe-wide survey of 600 municipal authorities. The results show that companies are held back by lack of skilled workforce and regulation more than by financing problems, even though the rate of corporate investment has recovered to pre-crisis levels. In particular, the report detects investment gaps in infrastructure and innovation, which threaten to undermine the long-term competitiveness of the European economy. In addition, the government investment rate is at its lowest level for 20 years.
The report reveals an urgent need to accelerate investment in research and development and other “intangibles” vital to innovation such as software, training, and organisational capacity. It shows that “lack of staff with the right skills” is now the most frequently cited deterrent to investment, mentioned by 72% of firms. This is followed by general “uncertainty about the future”, and business, tax and labour market regulations. More investment is also needed with regard to climate change mitigation, even though Europe remains a leader in this sector. While Europe is expected to meet its own targets for 2020, more investment is needed to reach the 2030 targets and beyond. The report therefore proposes Four Steps to Rebuild Europe's Economy, including boosting intangible investments, also in innovation. The other three are: access to finance, the business environment and climate action. Chapter 3 of report deals with recent developments in R&D, intangible investment and innovation in the EU and highlights the role of science and innovation as drivers of productivity growth in Europe (see Box 4, pp. 145-147).
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