The expenditure by the 27 EU member states (EU27) on research and development (R&D) accounted for 1.84 percent of the EU´s GDP in 2005 which is the same value as for the year 2004. In real terms, however, expenditure rose by 1.5% in the period from 2001 to 2005, as was reported by the European Statistical Office (Eurostat).
In 2005 the EU27 spent more than 200 billion Euros on research and development which means that the EU´s R&D ratio in proportion to GDP is markedly smaller than in other major economies. In the US R&D expenditure amounted to 2.68% of GDP in 2004, whereas this percentage was 3.18% in Japan. In China, however, the figure for the year 2005 was just 1.34 percent.
In real terms R&D expenditure by the EU27 rose by 1.5% annually in the period from 2001 to 2005 as compared to 1.7% in the US and 2.0% in Japan. In 2004 55% of all R&D was financed by private companies in the EU27, whereas this figure was 64%, 75% and 66% for the US, Japan and China respectively.