Investment, innovation and dependency– why does it matter?
By its nature the single market helps increase the economic resilience of the EU economy by strengthening incentives to investment and innovation. Furthermore, because of its scale, the single market provides a strong basis to mobilise investment and skills and to address regulatory challenges, which is needed to tackle strategic dependency experienced in key areas.
The indicators in this section measure the performance of the single market in terms of its ability to drive investment and innovation as expressed by the expenditure for research and development (R&D). These indicators show overall positive trends in both areas, although one can also observe comparatively low levels of R&D against some of the EU trade counterparts.
The innovation performance of the single market is also assessed by its ability to translate R&D in concrete outcomes such as high shares of value added and exports of high and medium technologies, with the indicators pointing to strong but overall share in the global market.
An indicator for the degree of dependency for the supply of raw materials complements the analysis pointing to an overall average degree of concentration for the EU for a basket of raw materials. This suggests the need to capitalise on the synergies offered by single market tools to strengthen the resilience of the EU economy in this area.
Net public investment as share of gross domestic product (GDP)
Public investment signals how economies prepare for challenges of the future.
This chart shows the development of public investment (net fixed capital formation) as a share of annual GDP for the EU, the UK and the USA. The values for 2022 and 2023 are estimates.
Source: European Commission, annual macro-economic (AMECO) database
Net private investment as a share of GDP
Private investment signals how industry prepares for challenges of the future.
This chart shows the development of private investment (net fixed capital formation) as a share of annual GDP for the EU, the UK, and the USA. The values for 2022 and 2023 are estimates.
Source: AMECO
R&D expenditure as a share of GDP
The following chart shows the development of R&D expenditure (as a share of annual GDP) for the EU, China, Japan, the UK and the USA.
Source: United Nations Educational, Scientific and Cultural Organization
Share of EU SMEs introducing product innovation
This indicator measures the share of SMEs that introduced at least one product innovation either new to the business or new to its market.
Product innovation is a key ingredient for innovation as it can create new markets and improve competitiveness. Higher shares of product innovators reflect a higher level of innovation activities.
SMEs include all enterprises with 10 to 249 employees, i.e. excluding micro-enterprises.
Source: Eurostat, Community Innovation Survey, 2010-2020
Global market share in medium and high technology manufacturing
This chart shows the global market share in medium and high technology manufacturing (gross value added) of the EU, China, Japan, the UK and the USA.
Source: United Nations Industrial Development Organization, Competitive Industrial Performance database; World Bank databases; Commission estimates
Global market share in high technology exports
This chart shows the global market share in high technology exports of the EU, China, Japan, the UK and the USA
Source: World Bank
Strategic dependency: raw materials
This chart shows an index of the degree of import concentration for a basket of critical raw materials in 2022 (data until July).
Source: European Commission