In 2000 the European Council agreed upon the Lisbon Agenda which has put forward as its main objective to make the EU "the most dynamic and competitive knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion, and respect for the environment by 2010". R&D and innovativeness is seen to be essential to reach this goal. Hence, the European summit in Barcelona agreed on the objective that by 2010 the EU should devote 3% of GDP to research and development. Despite some progress in some member states, R&D intensities (R&D expenditures as a percentage of GDP) remain significantly below the Barcelona goal. The R&D intensity in 2005 in EU27 stood at 1,84%. In this context, this study aims

• to provide a literature survey on the factors that determine the evolution of R&D expenditures and R&D intensities and other factors that affect the research base of countries, focusing on the effect of public R&D;
• to develop a methodology including suitable indicators to assess the co-evolution of R&D expenditures and GDP and the effect of public R&D on the research base in the EU;
• to estimate an econometrically model comprising the main factors affecting R&D spending;
• and to conduct an survey of country experts on R&D policy.