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fact sheet
28 August 2020

R&D investments in international perspective

Photo: Bai Kelin/Imagine China/Hollandse Hoogte
Research and development (R&D) is vital for economic growth and prosperity. It is important that we know how much we and other countries spend on R&D, as it gives an indication of policies that have proven successful in a given context. This factsheet looks at R&D investments in the Netherlands from an international perspective.

In short

  • In 2018, the Netherlands spent 2.14% of GDP on R&D.
  • Total R&D expenditure in the Netherlands is below the average of the OECD countries, but above the EU average.
  • R&D expenditure as a percentage of GDP is lower in the Netherlands than in a number of countries with which the Netherlands wants to compare itself.

R&D expenditure as a percentage of GDP

The amount of money spent on research and development (R&D expenditure) is important information for national and international policymakers. Statistics on R&D expenditure are used to see who carries out R&D, who finances R&D and where R&D takes place. Nominal total R&D spending in the Netherlands increased between 2013 and 2018 from € 14.2 billion to € 16.6 billion (CBS Statline). To compare the level of R&D spending over several years and between countries, we express R&D spending as a percentage of gross domestic product (GDP). This is also referred to as R&D intensity. In this way, the comparison takes into account the development of the size of the economy over time and differences between countries in the size of the total economy.

R&D expenditure

National and international policymakers and politicians need to know how much money is spent on R&D. Spending statistics are particularly useful for revealing who is performing R&D and where, and who is funding it. The total nominal R&D expenditure in the Netherlands increased between 2013 and 2018, from € 14.2 billion to €16.6 billion (CBS Statline). To enable comparison of R&D-expenditure over time and between countries, we express the R&D expenditure as a percentage of gross domestic product (GDP). This is also called the R&D intensity. In this way, the comparison takes into account economic growth over time as well as differences between countries in the size of their economies. 

R&D as percentage of GDP

The figure below shows developments in the total expenditure on R&D as a percentage of GDP, in the Netherlands, the EU and OECD-countries (on average). This figure is also used to measure whether the Netherlands reaches the internationally agreed R&D-percentage of 2,5% GDP. The data collection and analysis is based on international agreements published in the Frascati Manual, concerning R&D-related definitions and which types of expenditure are included and which not. In the national R&D statistics, as included in the graph below, business R&D expenditure is surveyed amongst companies. The companies include all their expenditures on R&D, including the expenditures for which they are compensated by fiscal measures (such as WBSO/RDA). Hence the foregone tax income due to these fiscal measures is not separately added to the R&D expenditures, otherwise there would be double-counting. In line with international R&D statistics, the Innovation Box (which resembles so called 'patent boxes') is not included in fiscal support for R&D and innovation. This is due to the fact that it does not lower the cost of R&D-expenditure, but rather lowers the tariff for tax paid over profits relating to R&D and innovation activities (see Frascati Manual 2015, p. 346).

Between 2013 and 2018, R&D intensity in the Netherlands has been below the OECD average, but (at least up to 2017) above that of the EU-15 and EU-28. In 2018, the Netherlands spent 2.14% of its GDP on R&D. This percentage is relatively stable over the presented period of time.

R&D expenditure by performing sector

The figure below shows how much R&D is performed by various sectors in a number of countries, expressed as a percentage of GDP. There is great variation in terms of R&D intensity. There are also differences in the degree of R&D intensity in different sectors. This reflects the structural differences between countries in the way R&D-performance is organised. Another conclusion is that the R&D intensity of the Netherlands is lower than that of a number of countries with which it likes to compare itself.

In 2018, corporate spending on R&D in the Netherlands is equivalent to 1.42% of GDP, above the EU-28 averages, but slightly below the EU-15 average and below some of the reference countries. The Netherlands falls in the middle of the rankings when it comes to R&D spending in higher education and research institutions.

R&D expenditure by funding source

In 2017, over half of the total € 16 billion R&D performed in the Netherlands is funded by business (€ 9.1 billion). A third is funded by government (€4.7 billion), 2% comes from other national funding sources (private non-profit) and 12% is from abroad.

Development of R&D funded by business

The indicator shows the size of R&D funding by the business sector, expressed as a percentage of GDP. There are differences between countries in terms of the R&D intensity of business funding. Dutch business funding comes just below the EU-15 average. Our data publication on R&D-expenditure by source of funds shows that it is also below that of most reference countries.

Development of R&D funded by government

The figure below shows the development is government funded R&D, as percentage of GDP. Government funding for R&D hovers around the EU and OECD-averages. The OECD-average shows a declining trend over the periode from 2011 onwards. The data publication about R&D expenditure funded by the government and business enterprises shows that there are considerable differences between countries in terms of government funded R&D intensity. 

Business funding of R&D at public knowledge institutions

Public knowledge institutions (HE institutions and public research institutions) receive funding from various sources. The government is the main source, but part of their funding also comes from industry.

The figure below shows the extent to which R&D activities at public knowledge institutions are funded by industry. The proportion of private funding at public knowledge institutions is slightly higher in the Netherlands than in other countries. Our data publication on privately funded R&D-expenditure in the public sector shows that private funding is much higher at the public research institutions than at the institutions for higher education.

About the data