Baltic Sea Region Territorial Monitoring System

Gross domestic expenditures on R&D, business sector

Indicator definition

This indicator is defined as the Gross Domestic Expenditure on Research and Development by business enterprises (GERD), expressed as a share of regional GDP.

Indicator importance

The GERD indicator is one of the headline indicators of EU2020 Strategy´s “Smart Growth” with the objective of reaching a level of public and private R&D expenditures of 3% of EU GDP by 2020. R&D activities are seen as specific assets of European economy, and only continuous future R&D activities will keep Europe´s economy competitive with USA, China and other countries.


The business sector R&D expenditure level reflecting knowledge intensity of the economy is at low levels in eastern and southern periphery of the area, but also in several regions of the UK. Among the new EU member states Czech Republic and Slovenia have converged with the central part of the EU and Estonia performs relatively well, too.

The business sector’s share of R&D expenditure reveals the east-west divide in BSR. The business sector of regions of the Nordic countries typically invests at least 0.5% of GDP into R&D, but in many cases much more. The R&D performance of the business in former East-German regions resembles less the Nordic pattern than that of the Baltic States and Poland. In the east, only Berlin and Estonia demonstrate higher than common levels of the indicator.