Abstract
This chapter analyses the evolution and current situation of investment in research, development, and innovation in Spain and Europe and its link with value creation. The research is carried out through an exploratory bibliographic analysis based on publications in the Web of Science, as well as numerous databases, projects, and reports issued by European and national entities. Four research questions are presented, related to the creation of value through the link between R&D and innovation. This study shows how these three concepts drive and generate changes in organisations and states that have an impact on their GDP, and the differences that exist between countries at European Union level, and between autonomous communities at regional level in Spain.
Top1. Introduction
Research and Development (R&D) is a systematic and creative process aimed at acquiring new knowledge and applying it to develop or enhance products, processes, or services. Research and Development encompass inquiry, experimentation, and the application of new knowledge with the goal of making advancements and contributing to progress in various fields of knowledge and technology (OECD et al., 2022; Oslo Manual, 2018).
Research, Development and Innovation is a concept that encompasses the three interrelated and complementary phases in the process of generating and applying knowledge for scientific, technological and economic advancement (OECD et al., 2022; Oslo Manual, 2018), and which more and more countries are allocating part of their state or regional budgets (Cotec, 2022). The governmental system of each country must be considered to put into context the investment made in Research, Development, and Innovation and any previous or subsequent comparisons.
Researchers focus on financial resources as the main driver of investment in Research, Development, and Innovation (González-Bravo et al., 2021; Himmelberg & Petersen, 1994). It is therefore relevant to be able to address the main differences at national, European, and international level from a financial system. Policy interventions are key to investment (Perez-Alaniz et al., 2023) although more Research is needed to find out whether the public or private sector predominates in R&D and Innovation investment.
The relationship between R&D&I and value creation in a country is fundamental to its economic, social and environmental Development. Fostering an enabling environment for Innovation can lead to greater competitiveness, economic prosperity and a better quality of life for citizens.
Value creation is a multidimensional concept that goes beyond simply offering products or services. It involves innovating, delivering quality, being efficient and contributing to the overall well-being of society and the environment.
When investing in Research, Development and Innovation (R&D&I), value is created for several actors and stakeholders: customers if the focus is on business, companies gaining a competitive advantage over the rest, employees finding opportunities for professional growth, countries improving the quality of life of their citizens and the environment through new services or processes that manage to reduce the ecological footprint through more sustainable solutions. This work focuses mainly on countries with their different sectors and national economies.
Given the importance and impact that R&D&I generates in the creation of value and, in turn, in society in general, it is important to be able to undertake a study that delves into the existing differences between the levels of R&D&I in Spain and Europe and the relationship that exists between R&D&I and the GPD.
This Research aims to raise awareness of the importance of investment in R&D&I, with the objective of promoting the creation of value and the Development of organizations at both public and private levels. The following Research questions will be answered in this Research:
RQ1: Are there differences in Research, Development and Innovation between Spain and Europe?
RQ2: Which sectors have the greatest weight in Research, Development and Innovation in Spain and Europe?
RQ3: Which Spanish territories allocate the largest budgets to Research, Development, and Innovation?
RQ4: How does GDP relate to R&D investment and to what extent does this impact on value creation?
Key Terms in this Chapter
The OECD (Organization for Economic Co-operation and Development): is an international organization that consists of 38 member countries, primarily from the industrialized world. The OECD works to promote policies that improve economic and social well-being globally. It serves as a forum for member countries to discuss and coordinate on a wide range of economic, social, and environmental issues. The organization conducts Research, publishes reports, and provides a platform for member countries to share information and best practices. The OECD's areas of focus include economic policy, trade, education, Development, and environmental sustainability.
The Cotec Report: Published by the Cotec Foundation for Innovation in Spain, this report reflects every year, since 1996, the situation of R&D&I in Spain. In addition to collecting the main indicators on the subject -national, regional, and international comparisons-, it offers the opinion of a panel of experts about the Spanish Innovation system and its foreseeable future evolution.
GDP: The Gross Domestic Product (GDP) is a quantitative measure of the total market value of all final goods and services produced in a country within a specific time period. It is commonly used as a key indicator to assess the economic health of a country and its level of economic activity. GDP is calculated by adding the value of production of goods and services across economic sectors such as agriculture, industry, and services, and subtracting depreciation. It can be expressed in nominal terms or adjusted for inflation to reflect changes in the purchasing power of the currency.
The Oslo Manual: is a set of guidelines developed by the Organisation for Economic Co-operation and Development (OECD) to provide a framework for collecting and interpreting data on Innovation activities in industry. Specifically, it offers guidance on the measurement of Innovation, covering aspects such as the definition of Innovation, types of Innovation, and methods for collecting data on Innovation processes. Value creation: refers to the process of generating additional value or benefits from a particular activity or resource. In a business context, it often involves increasing the worth of products or services for customers, shareholders, or other stakeholders. This can be achieved through Innovation, efficiency improvements, quality enhancements, or other strategies that result in a positive impact on the overall perceived value. Value creation is a fundamental concept in business strategy and management, emphasizing the importance of delivering benefits that exceed the cost of production or acquisition.
The Frascati Manual: is an international guideline published by the Organization for Economic Co-operation and Development (OECD) that provides standards for collecting and reporting data on Research and Development (R&D) activities. Covering a wide range of scientific and technological activities beyond just Innovation. This includes basic Research, applied Research, and experimental Development. Horizon 2020: is the European Union's flagship Research and Innovation programme that ran from 2014 to 2020. It was designed to foster scientific excellence and drive economic growth and competitiveness. The programme aimed to support a wide range of Research and Innovation activities across various sectors, including but not limited to science, technology, societal challenges, and industrial leadership. Horizon 2020 provided funding for collaborative projects, Research infrastructures, and initiatives that aimed to address global challenges and contribute to the overall advancement of knowledge and Innovation within the European Union. Horizon Europe: Horizon Europe” is the European Union's flagship Research and Innovation program designed to support scientific excellence and drive economic growth and job creation. Launched in 2021, it is the successor to the Horizon 2020 program. Horizon Europe aims to strengthen Europe's scientific and technological base by funding Research and Innovation activities across various sectors. The program encompasses a wide range of areas, including but not limited to climate change, health, digital technologies, and social challenges. It provides financial support to collaborative projects, Research infrastructures, and the Development of cutting-edge technologies to address global challenges and foster competitiveness within the European Union.