Research and development (continued)
Looking at the R&D commitment from the business sector in relation to total investments, there is a clear connection between these investments. That is to say, the higher the investments from the business sector, the higher the level of general investments in the country(13). This connection is not as clearobvious in most of the Nordic regions. The European pattern is most apparent in the Nordic metropolitan areas such as the Capital Region of Denmark and Region Skåne.
- Regional R&D investments in different sectors 2005
Source: The national statistical offices, Danish Centre for Studies in Research and Research Policy, STEP/NIFU, Stifterverband fürdie deutsche Wissenschaft. Estimate of Nordregio.
FOOTNOTES FOR THE TABLE:
1In Denmark it has not been possible to present R&D statistics according to the new regional divisions from January 2007. In this table the Capital Region of Denmark excludes Bornholm and includes that which was previously Roskilde County. East of Storebælt includes that which was previously Västsjælland County and Storstrøm County together with Bornholm’s Region municipality.
2Oslo & Akershus County have been combined to obtain better comparability with the other Nordic metropolitan regions.
3Source: Rosstat. Information on methodology is missing and the figures should therefore be interpreted with caution.
Even if the Öresund region cannot yet be regarded as a functionally well-integrated region, we see that 32 percent of total R&D investments from industry in 2005 for Denmark and Sweden were carried out in the Öresund region. This figure is by far a higher proportion than investments for Stockholm County (23 percent)and Västra Götaland County (21 percent). Investments in the Öresund region have also increased over time. In 1997 the Öresund region received 25 percent of all R&D investments from industry in Denmark and Sweden, showing that in 2005 investments increased by 7 percentage points.
Investments from industry in Denmark are largely concentrated to Öresund DK and the Capital Region of Denmark in particular. In 2005 about 74 percent of Danish R&D investments from industry were for Öresund DK, 71 percent for the Capital Region of Denmark and 3.1 percent for Region Sealand. In Sweden, these R&D investments are not concentrated to the capital city area in the same way. In 2005 some 33 percent of R&D investments went to Stockholm County, but 30 percent went to Västra Götaland County and 14 percent to Öresund SE.
- R&D expenses as a share of GRP (constant prices, reference year 2000)
Source: The Danish Centre for Studies in Research and Research Policy, Statistics Denmark and Statistics Sweden
However, when measuring R&D spending as a share of gross regional product the picture looks different. The region of Västra Götaland is then over-represented, followed by Öresund SE and Stockholm County. The total Öresund region with 2.8 percent is in fourth place. However, R&D intensity has risen sharply in recent years, particularly in the Capital Region of Denmark.
The structure of investments is nearly identical on both sides of Öresund. Significant market-oriented R&D investments from business (three fourths) are combined with more moderate investments from universities and government agencies. (However, the picture in Region Sealand looks a little different with more activity from government agencies). Stockholm is characterised by the same pattern. At the same time, industry and government agencies are more influential R&D players in Västra Götaland and Helsinki than in the Öresund region.
R&D investment among the neighbours of the Öresund region is generally moderate bordering on weak. St. Petersburg and Berlin are the main areas investing more intensively in research and development, but Hamburg is also an area investing in R&D.
In Berlin, R&D investments from industry account for only half of the investments, while investments from government agencies are more than three times larger than in the Öresund area. In Warsaw, government is nearly as strong a player as industry is in the Capital Region of Denmark. Like Helsinki, Hamburg and Tallinn have a weaker emphasis from industry in their investment portfolio while government investment is larger. In line with this, research and development in the eastern European metropolitan areas in the Baltic Sea area are generally less market-oriented than in the Nordic countries.
In the academic area, the Öresund region has two world-class universities and three top European universities, giving the region a strong position within the Nordic countries and among its closest neighbours in northern Europe. Only Stockholm has an equally strong ranking (see Chapter 3 Education).
If the investments are compared internationally in nominal amounts such as above in euro it is not certain that a similarly large sum can finance as much research and development in different countries and regions. This is of course due to differences in the structure of industry, direction of research and different cost structures. Another part of the explanation are the salary differences among countries and regions, and also among industries.
Differences in purchasing power for investment/expenditure are normally adjusted with different price indices. However, this is not possible in the R&D sector. As in so many other service industries, research and development requires sufficient staff. Thus, the main part of R&D investments go to salaries, which roughly account for two thirds of the costs in the case of the Öresund region14. Even if it is not possible today to more precisely analyse the effects of these conditions today, it is reasonable to assume that R&D investments on the Danish side of Öresund probably have lower purchasing power and thus can only finance a smaller amount of R&D than their Swedish counterparts. This fact is even more significant when making the same comparison between the regions of western and eastern Europe. The differences in purchasing power can affect the investment pattern for R&D in Europe considerably in the long-term.
