Expenditure on research and development increased last year

Posted on 4 December 2019, 10:00

According to Statistics Estonia, in 2018, the expenditure on research and development (R&D) in Estonia amounted to 365.6 million euros, which is a fifth more than in 2017.

The increase in R&D expenditure was somewhat expected, as the new financing period of the Structural Funds began in 2017 and its impact was felt also last year. Expenditure grew in all subsectors, but most of all in the higher education sector, where it grew 35% compared to the previous year. Also the business sector contributed more to R&D activities. The total R&D expenditure of enterprises was 155 million euros, which is 8% more than last year.

As in 2017, expenditure continued to grow mainly on account of investments. Total investments increased by 46% and the increase was notable in the higher education sector and public sector. Investments decreased in the business sector and private non-profit sector. Labour costs, which account for more than half of R&D expenditure, increased by 13% compared to the previous year. The only exception was the public sector, where labour costs decreased by 8%.

156 million euros, i.e. 43% of the R&D expenditure came from the state budget in 2018. This includes also European Union subsidies, which are included in the state budget and are therefore counted as government allocations. The majority (70%) of the state budget allocations went into the higher education sector. State budget allocations accounted for 6% of the R&D expenditure of the business sector.

Estonia’s R&D intensity index is the ratio of expenditure on R&D to GDP. In 2018, the R&D intensity index in Estonia was 1.4. According to preliminary data, Estonia is 13th among the European Union countries based on the index value. Compared to 2017, Estonia has moved up two places. The current growth rate implies that the objective to increase the share of R&D expenditure in the GDP to 3% by 2020 will probably remain unattainable.

For the statistical activity “Research and development”, the main representative of public interest is the Ministry of Education and Research, commissioned by whom Statistics Estonia collects and analyses the data necessary for performing this statistical activity.