In 2008, Veneto's expenditure on Research and Development amounted to 1,542 million euro, which placed it in fifth place in Italy's regional rankings behind Lombardia, Lazio, Piemonte and Emilia Romagna. Veneto's R&D expenditure, however, did increase by 24.1% on 2007 compared to a national growth of 5.9%. The annual increase of Veneto's expenditure is second only to that of Valle D'Aosta, whose absolute values are, however, much lower. Widespread investment in R&D, even by Small and Medium-sized Enterprises (SMEs), contributed to an increase in overall R&D expenditure, especially in situations where SMEs were at the heart of Veneto's production industry; the highly promising trend in Veneto's overall expenditure was indeed fuelled by the major contribution of its business activity, which grew by 36.4% in the last year. (Table 4.2.1)
and (Figure 4.2.1)
This sharp rise in enterprise investment has brought Veneto closer to the other Lisbon Strategy objective: the condition that two thirds of the expenditure be sustained by businesses. Indeed, Veneto businesses invested 64.6% of total R&D spending in 2008. Universities follow with a 25.1% share of the expenditure and public and private institutions and NGOs the remaining 10.2%. Distribution of R&D workers by institution is similar: 66.2% of research workers (calculated as the full-time equivalent) are employed by Veneto businesses, 25.3% by universities and the remaining 8.5% by public administrations and non-profit organisations. There are 23,884 research workers in Veneto, 4.9 for every 1,000 inhabitants compared to the national average of 4. (Figure 4.2.2)
Veneto's total R&D expenditure in 2008 was 1.05% of the regional GDP, lower than the national figure, 1.23% in 2008 and 1.27% in 2009. If we focus on the performance of this indicator in recent years, Veneto is the Italian region which has recorded the greatest annual growth, with more than half a percentage point of the GDP from 2000 to 2008. R&D expenditure in Veneto has indeed more than doubled in these 8 years, going from 0.51% to 1.05% of GDP, while growth on a national level in the same timeframe was 17.7%. (Figure 4.2.3)
and (Figure 4.2.4)
Enterprises which invest in Veneto
A total of 87.3% of all business expenditure in Veneto, which comes to almost 1 billion euro, stems from enterprises with registered offices in the region, and 12.7% from enterprises registered outside it, but which carry out research at production units in Veneto. Over half of business R&D investments from outside Veneto are from enterprises in Central and Southern Italy, probably because head offices of large groups are concentrated in the capital, while one third of expenditure is by enterprises with head office in the North West, mainly in Lombardia. (Figure 4.2.5)
and (Figure 4.2.6)
Enterprises both from Veneto and outside which invest most, over seven tenths of R&D expenditure, are those in the manufacturing sector, followed by those in trade, i.e. retail and wholesale. It may seem odd that trade businesses are interested in R&D, i.e. not just innovation but "the creative work undertaken systematically to increase knowledge, including knowledge of humanity, culture and society, and the use of knowledge for new applications" (Note 6)
. In actual fact, almost 15% of R&D expenditure is carried out by enterprises classified as being in trade since they engage in both production and distribution, but since their turnover is higher for the latter, they are classified as trade. Other relevant economic categories include information and communication services and professional, scientific and technical activity. (Figure 4.2.7)
and (Figure 4.2.8)
We have looked more closely at R&D in the manufacturing sector since it is the most interested in improving its technological content to keep its competitive advantage.
A total of 26.7% of R&D expenditure in this sector comes from mechanical companies, followed by the textile, clothes, leather and accessories sector, optics and electronics, chemicals-rubber-plastics, and metals, with expenditures which range from 11.1% to nearly 15%. There are also traditional Veneto activities, such as the jewellery, wood and furniture, sports items and food industries.
With the globalisation of goods, it is the rate of technological innovation which determines the competitiveness of products, processes and companies. On the one hand this leads to the growing introduction of intangible resources in the supply chain of traditional sectors, and on the other to manufacturing specialisations in advanced countries moving to more hi-tech sectors.
Even more important than the economic sector of businesses carrying out research in Veneto is understanding the type of products or services the research and experimentation concentrate on. Over 90% of companies prefer not to disperse this type of activity but concentrate on a single group of products, and these account for 90% of the total R&D expenditure in Veneto.
Of the total spent on developing or improving products or production processes (Note 7)
12.3% is spent on products in the pharmaceutical industry, 7.4% on textiles, 6.4% on electrical goods, 4.9% on machines for general use, 4.6% on packaging, 4.1% on the food industry, 4.0% on chemicals, 3.7% on metallurgy, and 3.5% on products, services and processes related to the distribution of electricity, gas and water. The other industries with lower percentages of investment are Veneto's traditional manufacturing industries, but this shows that even the traditional sectors, considered by many to have "mature technology", are carrying out research and development in order to make continuously evolving and improved products.
Amongst services, 2.4% of expenditure goes on the development or improvement of software, IT consultancy and related activities, 2.1% on development or improvement of any other service offered to companies or families and related technology, and 2.0% on products, services and processes related to financial and insurance services. (Figure 4.2.9)
Research workers in Veneto make up the equivalent of nearly 16,000 full-time workers and over 90% are employed by Veneto companies. Nearly 82% are male and over 78% are doing research for manufacturing industries.
An identikit of a Veneto company which carries out research
In 2008 companies with registered offices in Veneto invested 910 million euro in R&D, over 870 million of which in Veneto itself.
A total of 51.1% of investments come from companies with a turnover of over 50 million euro, 25.5% from companies with turnover of between 10 and 50 million euro, and 10.4% from those with turnovers of between 5 and 10 million euro. (Figure 4.2.10)
A total of 98% of expenditure by Veneto companies comes from corporations and from ones with more than 250 employees. Clearly the amount of investment is proportional to size and turnover, but we cannot fail to mention that 85% of Veneto companies investing in R&D belong to the category of Small and Medium-sized Enterprises (Note 8)
. (Figure 4.2.11)
In 2008 Veneto companies invested over 50 million euro in the energy sector, that is nearly 6% of total R&D expenditure. The largest sum was spent on research into energy efficiency (nearly 20 million euro), renewable energy sources (nearly 10 million euro) and technology for the conversion, transmission, distribution and storage of energy (over 6 million euro).
Research into biotechnology and nanotechnology, however, is still a niche sector in Veneto. Nearly 6 million euro was spent in 2008 on research into biotechnology (mainly on the use of cells and tissues and engineering of application processes in the biotechnology field) and the same amount on nanotechnology, above all on its application in the medical-health and life sciences sectors, and on nanomaterials.
The data mentioned until now regard intra-muros
research, that is carried out directly by the companies in their own facilities and with their own staff. Besides this, Veneto companies spend about 68 million euro on research which is outsourced (extra-muros
expenditure). It is mainly other Italian companies, 49%, which are involved in extra-muros
expenditure; 16% is accounted for by Italian companies of the same group, 9.7% by foreign companies, 9.3% by Italian research centres and private laboratories, and 7.5% by foreign companies of the same group. It is surprising that only 6.9% of enterprises' extra-muros
expenditure goes to universities and 1.4% to research centres, laboratories or public institutions (e.g. Italy's National Research Council (CNR), or National Agency for New Technologies, Energy and Sustainable Economic Development (ENEA) etc.).