Boost R&D to Ensure Sustainable Post-Covid Recovery: Economists

Increased investment in research and development is crucial to post-covid recovery, say economists calling for lasting improvements in the field.

The European Commission’s €750bn Covid-19 Recovery Fund should help the bloc to hit its longstanding – but so far consistently missed – target to spend three percent of GDP on R&D. Spending currently stands at about two percent.

Ministers have identified areas to focus on: innovation, renewable energy, AI, and space systems hubs. Commission funding depends on such commitment from member countries.

With economies in crisis, corporate funding will inevitably reduce – and there is pressure on the public sector to compensate.

R&D stagnation – a drop of five percent in its share of global expenditure in the first 15 years of this century – has put the EU behind the US, Japan, and South Korea. China’s share rose from five percent in 2000 to 21 percent in 2015. That intensity exceeded EU efforts in 2017 – and China shows no signs of holding back.

Chinese premier Li Keqiang announced in March that the country’s R&D budget would increase by more than seven percent per annum from 2021 to 2025 in a push for major tech wins.

China would enhance its strategic scientific and technological capabilities, he said, underpinned by the development of national laboratories. “(The country will) strive to make major breakthroughs in core technologies in key fields,” according to Li, “and formulate and implement a 10-year action plan for basic research.”