Romania spends only 0.49 percent of its GDP on research and development (R&D), the lowest rate among ten Central European countries analyzed by Deloitte. However, 71 percent of Romanian companies intend to increase their R&D spending in the years to come, according to the 2014 Deloitte CE Corporate R&D Report.

Some 57 percent of Romanian companies who were interviewed for this report said they currently spend up to 3 percent 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 percent of respondents anticipate spending more over the next three to five years, with none expect to decrease their R&D budgets,” he added.

The highest spending, of more than 5 percent of their turnover, is claimed by 22 percent of companies which mainly operate in the IT media and telecommunications sector. Only 3 percent of Romanian respondents said they spend nothing at all on R&D.

According to the report, 81 percent 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).

You can find more on the report here.

Andrei Chirileasa, andrei@romania-insider.com