Which EU Countries Spend the Most on Research & Development?

Key Takeaways

• The EU-27 spent 2.26% of GDP on R&D in 2023. That is up 0.44 percentage points from 1.82% in 2003. However, it is still short of the 3% target the bloc set in 2002.
• Six countries cleared the 3% threshold in 2023: Sweden (3.64%), Belgium (3.24%), Austria (3.22%), Germany (3.13%), Finland (3.09%), and Denmark (3.07%).
• Belgium made the largest climb (+1.40 pp) among countries now above 3%. It rose from 1.84% to 3.24%. It is driven by the recovery of business investment after the COVID-19 pandemic.
• Luxembourg and Finland are the only two EU countries with a lower R&D share in 2023 than in 2003.
• Luxembourg recorded the steepest drop. It fell by −0.56 pp from 1.62% to 1.06%. Financial services dominate its economy and carry low inherent R&D intensity.
• Several eastern member states more than doubled their R&D ratios over the period. However, most still sit below the EU-27 average of 2.26%.
• The private sector determines a country’s R&D ratio. Belgium’s businesses resumed investing after the pandemic and rose to 3.24%. Luxembourg’s financial services economy invests little in R&D by nature, which drove the ratio down.

Research and Development Investment Across EU Countries Over Time

Stay tuned!

Learn something new about Germany every week and make informed decisions with confidence.

Stay tuned!

Learn something new about Germany every week and make informed decisions with confidence.

In 2002, EU member states committed to spending 3% of GDP on research and development by 2010. However, it was not met. In 2023, the EU-27 average stood at just 2.26%.

EU R&D spending by country ranges from 3.64% in Sweden to 0.52% in Romania. All but two EU member states raised their Gross Domestic Expenditure on R&D (GERD) ratio between 2003 and 2023.

Only Six EU Countries Have Cleared the 3% R&D Threshold

Six countries met or exceeded 3% of GDP in 2023:

• Sweden (3.64%)
• Belgium (3.24%)
• Austria (3.22%)
• Germany (3.13%)
• Finland (3.09%)
• Denmark (3.07%)

Sweden and Finland were the only two already above 3% in 2003.

Sweden ranks highest at 3.64% and held that position in 2003 as well. Business enterprise is the dominant driver. Technology and manufacturing companies account for a substantial share of total Swedish R&D investment. These companies included Ericsson, Volvo, and ABB.

Belgium made the largest climb. It rose from 1.84% in 2003 to 3.24% in 2023. The private sector led the increase. Businesses resumed investment after the disruption from the COVID-19 pandemic, rising inflation, and the war in Ukraine. Companies accounted for nearly 74% of total R&D spending in Belgium in 2023.

Luxembourg and Finland Are the Only Two EU Countries Whose R&D Shares Fell

Luxembourg and Finland are the only EU member states that recorded a lower R&D share in 2023 than in 2003.

Luxembourg’s decline was the more severe. It dropped from 1.62% to 1.06%. Its financial sector accounts for roughly 25% of the country’s GDP. Financial services carry low inherent R&D intensity. As the sector grew relative to the rest of the economy, it pulled Luxembourg’s overall ratio down.

Finland dropped from 3.30% to 3.09% and remained above the 3% threshold.

Across the rest of the bloc, most member states sit below the EU-27 average of 2.26%. Several eastern countries recorded the largest proportional gains:

• Estonia: 0.76% to 1.83%
• Greece: 0.56% to 1.50%
• Poland: 0.54% to 1.56%

All three more than doubled their 2003 figures. However, all of them still sit below the EU-27 average. Romania ranks lowest in the EU at 0.52%.