European companies significantly increased their research and development (R&D) spending in 2024, particularly in strategic sectors such as energy, health, aerospace, and defence
According to the 2025 EU Industrial R&D Investment Scoreboard, published today, this growth underlines Europe’s strengths in key industries while also revealing mounting pressure from global competitors, especially in information and communication technologies (ICT).
The annual scoreboard, a key reference for policymakers and industry, analyses investment data from the world’s top 2,000 corporate R&D investors, including the 800 largest EU-based firms. Together, these companies account for more than 90% of global business-funded R&D.
Strong growth in strategic sectors
EU companies recorded especially strong R&D growth in the electricity and renewable energy sectors, where investment rose by nearly 20% in 2024. Capital expenditure in these areas also climbed by close to 18%, reinforcing Europe’s push to meet the objectives of the Clean Industrial Deal and accelerate the green transition.
The health sector was another standout performer. Leading European firms increased R&D spending by 13%, a rate significantly higher than that seen in other major economies. This performance highlights Europe’s growing role in life sciences and medical innovation, as global demand for health-related technologies continues to rise.
Aerospace and defence companies also stepped up investment, with R&D spending increasing by almost 5%. This reflects broader efforts to strengthen Europe’s defence readiness and technological autonomy amid a rapidly changing geopolitical environment.
Europe compared with global competitors
Despite these sector-specific successes, overall R&D growth among EU companies remained slower than in some other regions. In 2024, the world’s top 2,000 firms invested €1,442.6 billion in R&D, a 6.3% increase from the previous year. Growth was strongest in the United States and other non-EU regions, while the EU recorded a 2.9% increase. China also saw relatively moderate growth at 3.9%.
The data shows that EU firms outperform global rivals in energy and health-related R&D growth. However, they continue to face intense competition in ICT, where US companies remain dominant, particularly in software and digital platforms.
Innovation is concentrated in strong ecosystems
The scoreboard highlights that most R&D investment by leading EU companies is concentrated in countries classified as strong innovators. These include Austria, Belgium, Estonia, France, Germany, Ireland and Luxembourg. The concentration of investment in these countries underscores the importance of supportive national ecosystems, robust research infrastructure, and effective innovation policies in fostering R&D-intensive companies.
At the same time, the report suggests there is new potential across other parts of the EU, where improved conditions could help scale up innovative firms and broaden the continent’s industrial base.
Commission initiatives to strengthen innovation
To address global competition and reinforce Europe’s innovation capacity, the European Commission is advancing several major initiatives under the EU Competitiveness Compass. These include a new Startup and Scaleup Strategy to make Europe a more attractive place to build global tech companies, as well as the planned European Innovation Act and the so-called 28th Regime, expected in 2026.
Additional efforts focus on improving access to world-class research and technology infrastructures and accelerating the adoption of artificial intelligence in scientific research through the AI in Science Strategy and the Resource for AI Science in Europe.
Together, these measures aim to help European companies scale up faster, strengthen technological sovereignty, and ensure that Europe remains competitive in an increasingly innovation-driven global economy.
