DELOITTE TAX SRL

  |  23.07.2014

Romanian companies plan to increase their R&D spending

Most Romanian companies admit that research & development (R&D) is a key driver of economic competitiveness yet the country as a whole spends only 0.49% of its GDP on R&D, the lowest proportion among the 10 Central European (CE) countries participating in the 2014 Deloitte CE Corporate R&D Report.

However 71% of local companies intend to increase the amount they spend on R&D in the years to come and their percentage grows to 81% in next three to five years. The survey shows that more than half of the respondent companies (57%) spend up to 3% of their turnover on R&D.

 

“Reasons given for this low spend include a lack of perceived government incentives to encourage expenditure, as well as the poor promotion of those that do exist, too much bureaucracy in the application process and concerns about the treatment of R&D spending by tax authority”, said Ahmed Hassan, Country Managing Partner Deloitte Romania. “It is encouraging to note that over 80% of respondents anticipate spending more over the next three to five years, with none expect to decrease their R&D budgets.”

 

The highest spending (over 5%) is claimed by 22% of companies which mainly operate in the IT media and telecommunications sector. Only 3% of Romanian respondents said they spend nothing at all on R&D.

 

According to the report, 81% of the Romanian companies say R&D expenditure results in the improved competitiveness of their products and services.

 

The study has also revealed that the most important factors that could most effectively encourage companies to increase their R&D spending are the availability of various types of benefits and the cost of researchers, followed by the availability of experienced researchers and a greater emphasis on cash grants as opposed to tax incentives.

 

The survey was conducted among 330 companies in 10 countries of the region (Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia) and it shows that CE companies develop better understanding of what constitutes R&D activities. This change will help firms identify their business processes and costs that previously were not regarded as R&D, what may add to business expenditure on R&D growth in CE countries. The 2014 Survey also gives a chance to learn more about firms R&D policies, including that they put more emphasis on human capital management, recruiting and retaining most valuable people, or increasing interest in R&D portfolio management.

 

Other survey findings include:

 

* R&D collaboration between companies and scientific research units is growing, which is a positive sign in business and academia relations;

 

* More than one in five companies operating in the region (21%) have no R&D policy, but for the rest of them, the key aspects are sources of funding and the availability of appropriate human resources;

 

* Companies’ secrets policy is the most commonly used form of intellectual property rights/ know-how protection; however, company and sector-specific, tailor-made solutions involving more than one form of protection are recognised as the most effective.

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