The enormous importance of the pharmaceutical and biotechnology industries within Europe has been highlighted in the European Commission's latest European Union Survey on R&D Investment Trends.

The survey looks at the R&D spending plans of 449 companies in 10 industrial sectors. Together, these firms account for investments totaling almost 30 billion euros, but almost 60% of this figure is represented by the 81 pharmaceutical/biotechnology companies and 143 chemicals firms which responded.

The pharmaceutical/biotechnology firms said they expect their global R&D investments to grow around 5% annually over the next three years, and the report notes that, such is the importance of these sectors, this forecast growth rate becomes the average for the entire range of 10 sectors. It also represents a considerable improvement over recent years, it adds, noting that: “At that growth rate, European companies would be doing at least as well as their US counterparts in terms of R&D investment for the first time in several years.”

These latest findings also confirm that companies prefer to locate their R&D activities within their home countries, and Europe's leading locations continue to be Germany, the UK and France. Outside the EU, the USA remains by far the most attractive location for European companies' R&D activities, followed by China and India.

The most important factors for a company when deciding where to locate its R&D operations are: market access, high availability of researchers, access to specialised R&D knowledge and results, macroeconomic and political stability and R&D cooperation opportunities. Changes in labour costs and the availability of researchers were found to be more important for pharmaceutical/biotechnology than for other sectors.

Examining companies' reasons for investing in R&D, the survey discovered that, for pharmaceutical/biotechnology firms, changes in a country's market regulation and legal framework for R&D are important, as are public support for such activities and R&D cooperation opportunities. However, changes in competition from EU, US and Japanese companies were found to be “particularly unimportant” for firms in this sector.

Pharmaceutical/biotechnology companies also outsource more of their R&D investment than other industries, at 25% compared with a 10-sector average of 18%, the study found. 20 firms providing support services to pharmaceutical/biotech - mainly contract research and R&D-related services - also contributed to the survey. By Lynne Taylor

To read the European Commission's 2005 Survey on R&D Investment Business Trends in 10 Sectors, visit: