1. SICENTER Ljubljana, Slovenia Time for a fresh start But time is not on our side Urgent need for more R&D resources for Lisbon strategy Ljubljana, June 13, 2005 Professor Pavle Sicherl SICENTER and University of Ljubljana Email: Pavle.Sicherl@sicenter.si; www.sicenter.si Copyright © 1995-2005 P. Sicherl All rights reserved

2. Differences with the USA are much larger for R&D per capita (index USA/EU15=183) than for GDP per capita (index 141).

3. The time lag behind the USA over time has been the highest for employment rate and R&D per capita (25 and 23 years) Source: P. Sicherl, A Comparison of European and US Economies Based on Time Distances, EUROCHAMBRES, Brussels, March 2005.

4. Small improvements are no match for the large gap. If growth rate for R&D per capita for EU15 would be only 0.5% higher than that of the USA, the catch up would take place only in 2123, for 1% higher growth rate only in 2063. We need a big push. Source: P. Sicherl, A Comparison of European and US Economies Based on Time Distances, EUROCHAMBRES, Brussels, March 2005.

5. The competitive position is much better measured by R&D per capita or R&D per employed than by the share of R&D in GDP. The target of 3% share of R&D in GDP is a good mobilisation instrument in the medium term. However, even if implemented it would not mean catching up or even surpassing the USA in R&D per capita at such time Assumption that EU15 would reach 3% of R&D/GDP already in 2003: Index USA/EU15 2003: GERD/GDP 0.92 x GDP per capita 1.40 = GERD per capita 1.29 Even if the target of 3% share would be implemented already in 2003, because of much lower GDP per capita the R&D per capita would be in this hypothetical situation in the USA still higher than in the EU15 by 29 percent (or by 27 percent for R&D per employed). Europe has to do much better for Lisbon strategy.