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Europe is facing a crisis in science and technology according to two new reports. The European Commission says its figures show a continuing decline in the amount European firms are increasing their spending on R&D. It warns that if the trend is not reversed, Europe will miss its target of boosting R&D spend to three per cent of GDP by 2010, and that this represents a "major threat" to Europe's knowledge economy.

Figures for 2005 show that R&D intensity, as the EC calls it, is close to stagnation. Although the amount invested in R&D as a percentage of GDP is still growing, the growth rate has been falling since 2000, and only rose by 0.2 per cent last year.

Currently, Europe spends an average on 1.93 per cent of its GDP on research and development - much less than the US and Japan, who spend 2.59 per cent and 3.15 per cent respectively. Even China is likely to pull ahead of Europe. Although it only invests 1.31 per cent in R&D at the moment, its spend has been growing at around 10 per cent per year, since 1997, putting it on track to reach 2.2 per cent investment by 2010.

The EC points to a slow down in business investment in R&D as being behind the poor figures, although it conceded that an increase in the amount governments are pumping into the sector has compensated slightly.

Meanwhile, analysts at research house, Forrester, warn that Europe is also facing a looming IT skills crisis. It says that by 2006, companies will not need technicians, so much as more business-focused IT managers. The shift will be driven by an increase in outsourcing of routine tech activities.

Forrester argues that although the Education system should be able to develop the courses that will produce these more corporate-than-BOFH IT types, it will not happen fast enough to meet the demands of businesses in the region. ®

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