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Albania remains the last in Europe for research and development expenditures

2023-12-01 14:49:00, Ekonomi CNA

Albania remains the last in Europe for research and development expenditures

The funds spent on promoting innovation and research and development in Albania are the lowest in Europe, relative to the size of the economy. According to the European Commission, in 2022, these funds were only 0.05% of the Gross Domestic Product (GDP).

Other Eurostat data published today show that funding for research and development is much lower than the European average of 2.22% of GDP and lower than neighboring countries.

In the region, the record is held by Serbia, with 0.97% of GDP. Bosnia and Herzegovina and North Macedonia have this indicator, respectively 0.19 and 0.37% of GDP for 2021 and 2020. The data for Montenegro and Kosovo are missing.

According to the European Commission's latest report on the expansion in the "Science and research" chapter, Albania increased funding for scientific research to 0.08% of GDP in 2023, from 0.05% in 2022 and 0.04% in 2021, however this is still far below the 1% of GDP target by 2030.

Research funding as a percentage of public expenditure reached 0.17% of GDP in 2022. INSTAT should produce a complete set of data on scientific research and innovation, notes the Commission.

Research and development spending is important to a country as it is an essential driver of economic growth, driving innovation, invention and progress, improving the well-being of citizens.

In the last 30 years, Albania has had as its main competitive advantage the cheap cost of labor force, which has caused innovation not to be in focus. Now that wages have risen, many industries are facing problems, risking closure, as they are no longer competitive.

Europe

According to Eurostat, in 2022, the EU spent 352 billion euros on research and development (R & D – Research and Development), 6.34% more than in the previous year (331 billion euros) and 48.52% more than in 2012 (237 billion euros).

When looking at R&D intensity, ie. R&D spending as a percentage of GDP, the data shows a slight decline from 2.27% in 2021 to 2.22% in 2022.

Among EU member states, 4 countries recorded R&D intensity above 3% in 2022. The highest R&D intensity was recorded in Belgium (3.44%), followed by Sweden (3.40%), Austria (3.20%) and Germany (3.13%).

In contrast, 8 EU countries reported R&D intensity below 1%: Romania (0.46%), Malta (0.65%), Latvia (0.75%), Cyprus and Bulgaria (both 0.77%) recorded the lowest percentages , followed by Ireland, Slovakia and Luxembourg with shares close to 1%.

Between 2012 and 2022, R&D intensity in the EU increased by 0.14 percentage points (pp). The biggest increases were recorded in Belgium (1.16 pp), Greece (0.77 pp) and Croatia (0.69 pp).

In contrast, R&D intensity decreased in 8 countries. Ireland fell by -0.6 pp, followed by Finland (-0.45 pp), Estonia (-0.35 pp), Slovenia (-0.30 pp), Luxembourg (-0.23 pp), Denmark (-0.22 pp), Malta (-0.15). pp), and France (-0.13 pp).

The business enterprise sector continued to account for the largest share of R&D spending.

In 2022 it represented 66% of EU R&D spending, totaling 233 billion euros. It was followed by the higher education sector (22%; 76 billion euros), the government sector (11%, 37 billion euros) and the private non-profit sector (1%; 5 billion euros)./ Monitor magazine 

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