Businesses have invested the most
Total spending on R&D activities, which reached EUR 691 million in 2022, has risen by EUR 67 million, or almost 11 per cent, per year. Businesses were the biggest contributors to this growth, accounting for 39 per cent of total R&D spending.
“Business is the main and recently the most growing source of R&D funding. R&D spending in the business sector amounted to EUR 335 million last year, the majority (73 per cent) of which was financed by businesses themselves, and the rest by EU funds. Comparing the volume of this spending with 2021, we can see that R&D spending in the business sector grew by 9.2 per cent, or EUR 28 million per year,” comments Jonė Kalendienė, Head of Research and Analysis of the Innovation Agency.
Large and medium-sized enterprises were more successful at R&D investment, with a significant increase in their annual R&D spending, while R&D spending by micro and small enterprises with up to 50 employees decreased slightly. They are likely to have been more cautious due to external risks and reduced access to EU investment.
“The decisions of businesses to invest more in long-term R&D are likely to have been hampered by imbalances in the global economic environment and the war in Ukraine. EU investment has been declining since the end of the old EU funding period in 2022, shrinking by EUR 15 million, or 18 per cent, per year. Of course, we should be pleased that these factors did not slow down the growth of overall business R&D spending and that today we have excellent results,” says Ms Kalendienė.
The expert also points out the positive aspect of the increase in the number of companies that spent on R&D last year, which rose by 55 companies to reach 1106.
Investment in R&D growth forecasted
Gintarė Kuncaitytė, Head of Investment Assessment of the Innovation Agency, predicts that spending on R&D activities will only grow this and next year, one of the reasons being the new 2021–2027 EU funding period which started at the end of 2022. This includes EUR 263 million of investment managed by the Innovation Agency to promote innovative activities alone.
“This year, we have already signed 47 contracts under the “InoStart” call, with EUR 7.48 million for beginner innovators. We have also signed 26 “InoConnect” contracts for EUR 0.479 million to fund the participation of small and medium-sized enterprises in international RDI initiatives. These investments will certainly contribute to the growth of R&D spending by smaller enterprises,” comments Ms Kuncaitytė.
The “InoProgress” and “InoMaturity” calls for advanced and mature innovators investing in new high added value product development activities close on 13 November. Around 150 applications are expected and as much as EUR 35 million from the European Regional Development Fund has been earmarked to finance these projects.
“The project aimed at implementing mission-driven science and innovation programmes that will contribute to solving relevant societal challenges will also be highly significant for the Lithuanian innovation ecosystem. By mid-2026, three already selected consortia will receive funding of up to EUR 78 million, invest almost the same amount themselves, establish 3 centres of excellence, implement 23 R&D projects, develop 33 unique products, 41 prototypes and set up 23 spin-offs or startups,” points out Paulius Petrauskas, Director of the Breakthrough Department of the Innovation Agency.
“These measures are only a part of the opportunities to promote innovation launched this year by the Innovation Agency. We will see the first signs of their impact in the 2023 results, and we are likely to see an even bigger change in 2024. In addition to all the financial measures, education and knowledge are also very important, which is why we are trying to create the best possible conditions for companies to participate in international accelerators, business missions and learn from international best practices,” shares Mr Petrauskas.
According to a survey of companies conducted by the Innovation Agency last year, financial support is the main incentive for businesses to carry out R&D activities. Moreover, companies recognise that the need for R&D stems from a desire to grow their business and increase their competitiveness; however, they face a lack of financial and human resources when carrying out these activities.
In order to motivate companies even more to take advantage of R&D investment and to facilitate the declaration of R&D spending, the Innovation Agency has initiated additional actions to reduce the challenges and facilitate the process. In addition, companies carrying out R&D activities are eligible for corporate income tax relief and the Innovation Agency provides expert
