Luxembourg still playing catch up on research spending
Luxembourg's spending on research and development continues to lag behind the rest of the EU, with the country's overall expenditure lower than the average across the bloc in 2021, according to new data published by the EU's official statistics agency Eurostat on Wednesday.
Although the Grand Duchy had the highest expenditure on research per person of any EU country, at almost €700, it amounted to just 1.41% of all government spending last year, representing a drop compared to 2015, when it stood at 1.53%.
That put the country tenth out of 27 EU countries, although below the bloc's average of 1.46%. Luxembourg was ahead of its neighbours France and Belgium, which spent 1.2% and 1.24% on R&D in 2021 respectively, Eurostat said. Germany is the leading investor on the continent, with spending on research encompassing more than 2% of all government expenditure.
From next year through to 2025, the Grand Duchy has pledged to increase research funding by nearly €300 million to €1.7 billion overall, the government said earlier this year. The new spending could create 580 additional positions in public research, according to the government.
To try to compete with European neighbours, Luxembourg - a country without a long tradition of research and only one recently established university - is also ploughing millions into private companies who then work with public research institutes on innovative projects.
“We are still behind the EU average and we need to pursue... public research sector growth, but with (the) ambition to establish bridges to the business and private sector,” Marc Schiltz, who heads Luxembourg's National Research Fund (FNR), said last year.
Luxembourg's heavy reliance on the services industry - in particular its financial sector, which contributes to around a third of the country's economy - could be one reason why innovation in Luxembourg is lagging behind.
"In general they [the financial sector] do less research in innovation than the industrial sector which is research-intensive,” said Schiltz.
Luxembourg's only university was set up in 2003, roughly at the same time that the country started investing heavily in R&D. In 2019 it spent €428.3 million on innovation, from just €23.6 million in 2000, according to official figures.
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