In this week of European elections, it is more topical than ever to look at the resources allocated by the European Union to major projects and to compare them with what its main competitors are doing. A short introduction that will be followed by a series of interviews with various experts in different fields.
Global R&D growth
The “Horizon 2020” programme, launched in 2014 and ending in 2020, set itself the objective of investing 3% of GDP in R&D. The initiators of this EU framework programme, which includes all financing, had predicted that they could “create nearly 3.7 million jobs and increase the gross domestic product by around 800 billion euros by 2025“. It will be replaced from 2021 to 2027 by “Horizon Europe“, which we have already mentioned, with a target of 100 billion euros to finance Research and Innovation.
In comparison to this plan, which is still at the advisory stage, the World Bank estimates global R&D expenditure for 2016 at 2.22% of GDP (most recent data available). A percentage that is growing steadily (in 1996, the figure was 1.97% of GDP). Using this indicator, we note that the European Union devotes 2.03% of GDP (2.13 for the Euro zone), the USA 2.66%, China 2.11% and Russia 1.10%. You cannot miss the phenomenon that is Switzerland with their 3.37% of GDP devoted to R&D.
Let us not forget that, alongside the major world blocs and states, you can now find the global giants (GAFAM and NATU companies). For example Recode media estimated that in 2018, Amazon was the leading R&D investor in the USA with 23 billion dollars. Amazon is ahead of Alphabet, which has invested $16.6 billion. Apple, which is only fifth after Intel, invested 11.6 billion.
The space race
As we have just seen with the Rosetta Probe, the launch of Galileo and, more recently, black hole photography (the result of international cooperation in which it has been an active participant), Europe is a major player in space. What about investments? In 2016, the EU launched “a public consultation on the European Space Strategy“. The plan agreed on at the end of the consultation should translate into a budgetary investment of €16 billion in programmes such as Galileo/Egnos and Copernicus.
It is difficult to judge such initiatives against other objectives set by the major world blocs. However, it is possible to compare the annual budget of the space agencies. While ESA has a budget of 5.72 billion euros in 2019, NASA’s budget is about 21.5 billion dollars, while the Chinese National Space Administration had a budget of 11 billion dollars in 2017.
Obviously these budgets conceal differing strategies as we saw in an editorial on the Space X Project.
AI in pride of place
Artificial intelligence is firing on all cylinders, and the EU is keen to make its contribution. In a recent press release, it was announced that “Member States and the Commission will work together to boost “Made in Europe” artificial intelligence . This will undoubtedly be one of the “flagship” topics of the future Horizon Europe plan. The authors of the communiqué also acknowledge the low level of investment: “Investment levels for AI in the EU are low and fragmented, compared with other parts of the world such as the US and China. (…) In line with the AI strategy presented in April, the plan foresees increased coordination of investments, leading to higher synergies and at least €20 billion of public and private investments in research and innovation in AI from now until the end of 2020 and more than €20 billion per year from public and private investments over the following decade. Complementing national investments, the Commission will invest €1.5 billion by 2020, 70% more than in compared to 2014-2017. For the next long-term EU budget (2021-2027) the EU has proposed to invest at least €7 billion from Horizon Europe and the Digital Europe Programme in AI.”
Will these remarkable efforts be enough? Especially when we know that the Trump administration has decided to make AI a priority in the context of confronting China. The Pentagon has announced the creation of a dedicated AI centre with an annual budget of $75 million (a total of $1.7 billion over five years) and in September Darpa hopes to allocate a budget of $2 billion over five years. China announced a Major Plan for AI in 2017 that can be summarized into three objectives: “to be a leader in the field by 2030, to reach a subsidy level of at least 23.15 billion dollars by 2020 (the European Union’s is 20 billion euros but requires the contribution of member countries), and to create a national market of 156 billion dollars.” Finally, we should stress the fact that for this field perhaps more than for others, the development of AI will vary according to socio-cultural differences and will be strongly influenced by them: from “Chinese facial recognition” to European “GDPR” and the flexibility of US laws, there will be all manner of possible subtleties…
Whether it is R&D, Space or AI, the future European Commission will certainly have to contend with fierce competition and, as we may well imagine, staying in the race will not just be a matter of backing it with resources. Strategies will also have to be put in place.
To complete this introduction, we invite you to read our interviews with experts: