Download publication

Policy Contribution

Are European firms falling behind in the global corporate research race?

The author looks at how concentrated corporate R&D is in Europe, compared with sales and employment. The US and China are more likely to produce new R&D leaders that take over some of the top positions from incumbent R&D leaders. How is the EU coping with technology shifts and creating the next generation of new leading firms?

By: Date: April 12, 2018 Topic: Digital economy and innovation

Technological progress, such as robotics and artificial intelligence, is often blamed for the loss of jobs and rising income inequality. It is also linked to increasing inequality in the corporate landscape as superstar firms forge ahead in winner-takes-most markets.

Our analysis shows that in most sectors there is a high degree of concentration among a few top companies in research and development spending. R&D spending is much more concentrated than sales and employment. In 2015, for example, the top 10 percent biggest spenders on R&D, accounted for 71 percent of the R&D spending of the 2500 companies that spend most on R&D. This concentration is most obvious in the high-tech biopharma and digital sectors, though it is also true for other sectors, such as the vehicles sector. US companies are overrepresented among these R&D superstars, especially in digital sectors where they take up half of the top slots.

Over the last decade, there has been little evidence for increasing concentration in the global R&D landscape. On the contrary, a slight decline is discernible. Slight increasing concentration can only be detected in digital sectors, with in particular the top 1 percent of R&D spending firms in these sectors forging ahead.

Although the overall concentration of R&D spending among a few leading firms might not be changing much over time, R&D leaders are slowly losing their positions to new R&D-leading firms. Digital Services is the most turbulent high-tech sector. The US and China are more likely to produce new R&D leaders that take over some of the top positions from incumbent R&D leaders. This poses difficult questions for Europe, which is at risk of losing out in terms of R&D leadership in more technologically advanced sectors.

Read about event More on this topic
 

Upcoming Event

Jun
29
14:00

Autonomous, digital and green Europe: a conversation with Margrethe Vestager

At this event Margrethe Vestager will reflect on strategic autonomy, digital regulation and the implications of the Green Deal on competition.

Speakers: Guntram B. Wolff and Margrethe Vestager Topic: Macroeconomic policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read article More on this topic More by this author
 

Blog Post

A practical arrangement for cooperation between digital economy regulators

Overlapping rules in the digital economy require cooperation between national regulatory authorities; a practical arrangement based on case information, case allocation and case resolution would ensure consistency and effective enforcement.

By: Christophe Carugati Topic: Digital economy and innovation Date: June 13, 2022
Read about event More on this topic
 

Past Event

Past Event

Future of Work and Inclusive Growth Annual Conference

Annual Conference of the Future of Work and Inclusive Growth project

Speakers: Erik Brynjolfsson, Arturo Franco, Carl Frey, Andrea Glorioso, Francis Green, Francis Hintermann, Ivailo Kalfin, Vladimir Kvetan, J. Scott Marcus, Anna Kwiatkiewicz-Mory, Anoush Margaryan, Julia Nania, Laura Nurski, Poon King Wang, Monika Queisser, Fabian Stephany, Niels van Weeren and Guntram B. Wolff Topic: Digital economy and innovation Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: June 7, 2022
Read about event More on this topic
 

Past Event

Past Event

MICROPROD Final Event

Improving understanding of productivity, its drivers and the way we measure it.

Speakers: Carlo Altomonte, Eric Bartelsman, Marta Bisztray, Peter Bøegh Nielsen, Italo Colantone, Maria Demertzis, Wolfhard Kaus, Javier Miranda, Steffen Müller, Hannu Piekkola, Verena Plümpe, Niclas Poitiers, Andrea Roventini, Gianluca Santoni, Valerie Smeets, Nicola Viegi and Markus Zimmermann Topic: Macroeconomic policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: May 31, 2022
Read about event
 

Past Event

Past Event

Three data realms: Managing the divergence between the EU, the US and China in the digital sphere

Major economies are addressing the challenges brought by digital trade in different ways, resulting in diverging regulatory regimes. How should we view these divergences and best deal with them?

Speakers: Susan Ariel Aaronson, Henry Gao, Esa Kaunistola and Niclas Poitiers Topic: Digital economy and innovation, Global economy and trade Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: May 19, 2022
Read about event More on this topic
 

Past Event

Past Event

Adapting to European technology regulation: A conversation with Brad Smith, President of Microsoft

Invitation-only event featuring Brad Smith, President and Vice Chair of Microsoft who will discuss regulating big tech in the context of Europe's digital transformation

Speakers: Maria Demertzis and Brad Smith Topic: Digital economy and innovation Location: Bibliothéque Solvay, Rue Belliard 137A, 1000 Bruxelles Date: May 18, 2022
Read article More on this topic More by this author
 

Opinion

Buy now, pay later: the age of digital credit

A relatively new fintech market, BNPL is currently not regulated in the EU, meaning that consumers do not have the same protection level as they do for other credit products.

By: Maria Demertzis Topic: Digital economy and innovation Date: May 17, 2022
Read article More on this topic
 

Blog Post

Insights for successful enforcement of Europe’s Digital Markets Act

The European Commission will enforce digital competition rules against big tech; internally, it should ensure a dedicated process and teams; externally, it should ensure cooperation with other jurisdictions and coherence with other digital policies.

By: Christophe Carugati and Catarina Martins Topic: Digital economy and innovation Date: May 11, 2022
Read about event More on this topic
 

Past Event

Past Event

COVID-19 and the shift to working from home: differences between the US and the EU

What changes has working from home brought on for workers and societies, and how can policy catch up?

Speakers: Jose Maria Barrero, Mamta Kapur, J. Scott Marcus and Laura Nurski Topic: Inclusive growth Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: April 28, 2022
Read article More on this topic
 

Blog Post

The decoupling of Russia: high-tech goods and components

Sanctions on high-tech goods supplies, combined with financial sanctions and other restrictions, will deprive Russia of a future as a modern economy.

By: Monika Grzegorczyk, J. Scott Marcus, Niclas Poitiers and Pauline Weil Topic: Global economy and trade Date: March 28, 2022
Read article
 

Blog Post

The decoupling of Russia: software, media and online services

Restrictions so far on software, media and online services in Russia have been imposed either voluntarily by firms, or else by Russia itself in order to restrict the flow of information.

By: J. Scott Marcus, Niclas Poitiers and Pauline Weil Topic: Digital economy and innovation, Global economy and trade Date: March 22, 2022
Read about event More on this topic
 

Past Event

Past Event

Who will enforce the Digital Markets Act?

While the Digital Markets Act entered its first trilogue, what will be the enforcement role of the Commission and the Member States?

Speakers: Christophe Carugati, Cani Fernández, Assimakis Komninos and Georgios Petropoulos Topic: Digital economy and innovation Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: March 22, 2022
Load more posts