R&D investments in international perspective | Rathenau Instituut (2024)

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. Thetotal nominal R&D expenditure in the Netherlands increased between 2013 and 2021, from € 14.2 billion to € 19.8 billion (CBS Statline). To enable comparison of R&D-expenditure over time and between countries, we express the R&D expenditure as a percentage ofgross domestic product (GDP). This is also called the R&D intensity. In this way, the comparison takes into account economic growth over timeas well as differences between countries in the size of their economies.

R&D as percentage of GDP

The figure below showsdevelopmentsin thetotal 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 Netherlandsreaches the internationally agreed R&D-percentage of 3% 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') isnot included in fiscal support for R&D and innovation. This is due to the fact thatitdoes not lower the cost of R&D-expenditure, but rather lowers thetariff for tax paid overprofits relating to R&D and innovation activities (see Frascati Manual 2015, p. 346).

Between 2013 and 2021, R&D intensity in the Netherlands has been below the OECD average, but above that of the EU-27. In 2021, the Netherlands spent 2.27% of its GDP on R&D. This percentage is relatively stable over 2013-2019. The increase in 2020 is not only due to an increase in spending, but also to a declining GDP as a result of the COVID-19 crisis.

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 2021, corporate spending on R&D in the Netherlands is equivalent to 1.49% of GDP, above theEU-27average, but below the OECD average.

R&D expenditure byfunding source

In 2020, over half ofthe total € 19.8 billion R&D performed in the Netherlands is funded bybusiness (€ 11.2 billion). Almost a third is funded by government (€6.1 billion). The restcomes from other national funding sources (private non-profit) and from abroad.

Development of R&D funded by business

The indicator shows thesize 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 is below OECD level, but above EU-27. Our data publication on of funds shows that it is also below that of most reference countries.

Development of R&D funded by government

The figurebelow shows the development is government funded R&D, as percentage of GDP. Government funding for R&D is just above the EU and OECD-averages. The data publication about shows that there are considerable differences between countries in terms of government fundedR&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 shows that private funding is for the public research institutions andhigher education around 8%.