Estonia belongs by research and development growth rate to the European Union leader countries

In the research and development (R&D) intensity growth ranking table of the EU 27 countries Cyprus was leading with 10% and Estonia was followed by Latvia with 7%. The intensity of R&D is measured by the ratio of the R&D expenditures to the gross domestic product (GDP) and the spectacular growth of Estonian R&D intensity is more valuable taking into account that it came about in the background of the high growth of Estonia’s GDP. In several developed industrial countries and in the European Union as total the back gear was switched on for the indicator under consideration despite the moderate GDP growth there.

Average annual growth rate of R&D intensity, 2001–2007^a

Source: Eurostat.

^a Exception to the reference period: 2001–2005 — Italy, 2001–2006 — Poland and the United Kingdom. 2004–2007 — Luxembourg and Malta.

Taking a glimpse in R&D intensity absolute values that was for Estonia 1.14% in 2007 one can discover that Estonia stood on the 16th position among 27 Member States and was comparable with the respective indicators of Spain, Portugal and Italy. But as the aim in front of us looms the European Union mean — 1.83% in 2007. With respect to R&D intensity Sweden and Finland were in the leading positions, Lithuania and Latvia occupied the 19th and 20th position respectively and Cyprus in spite of the highest growth rate still in the far end.

In 2007, the expenditure on R&D reached 2.7 billion kroons in Estonia. Compared to 2006, the R&D expenditure increased by 15%. It is notable that enterprises had more visible role: the increase of their expenditure equalled 22%, that for non-profit sectors (universities and other institutions) only 9%. Last year the expenditure of enterprise sector accounted for already 47% from the gross R&D expenditure but the share of the working hours spent on R&D in that sector remained on the 34% level. This is the consequence of the fact that enterprises are involved mainly in the experimental development that is more expensive than basic and applied research performed by our scientific institutions. The differences in the labour cost are playing a certain role as well.

With regard to Estonia, it is crucial to maintain the high growth rate. As a source of innovativeness the research and development activities form an important part in the basis for the future economic growth.