Business investment makes up lion’s share of Malta’s €140 million spend on R&D

€140.2 million was spent on research and development in Malta in 2024, an increase over the €121 million spent in 2023, data published by the National Statistics Office shows.

In 2024, this amounted to 0.61 per cent of GDP.

The business enterprise sector contributed 70.8 per cent to total R&D expenditure, whereas the higher education and Government sectors contributed 27.2 per cent and 2 per cent respectively.

In 2024, both the business sector and the Government sector reported an increase in R&D expenditure compared to 2023, although the higher education sector reported a decrease.

During the election campaign this year, the Labour Party had pledged a 175 per cent tax credit for research and innovation (R&I) expenses incurred by all businesses.

“The highest increase in outlay of €21.5 million was registered under the business sector whilst the Government sector increased by €0.8 million. The higher education sector reported a decrease of €3.2 million," the NSO said.

42.3 per cent of the total was spent on basic research, defined as “experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundation of phenomena and observable facts, without any particular application or use in view.”  30.7 per cent was spent on applied research and 27 per cent on experimental development.

In terms of the fields in which expenditure on R&D was made, the highest expenditure (56.1 per cent of the total) was in engineering and technology. The second highest amount was spent in medical sciences R&D (15.8 per cent) and the third highest in natural sciences (11.1 per cent).

“Most of the R&D activity in engineering and technology and medical sciences was undertaken in the business enterprise sector, whereas research in relation to social sciences and humanities was mainly carried out by the higher education sector. Year-on-year comparisons show that the highest increase was registered in engineering and technology (€16.7 million), followed by medical sciences (€9.7 million). These increases outweighed a decrease of €11.4 million in natural sciences.”

In terms of employment in the R&D sector, In 2024 there were 3,760 employees were engaged in R&D work, of whom 2,148 spent a portion of their time on R&D projects, while the remaining 1,612 employees dedicated their entire working time on R&D projects. In 2020, the number of people working in the sector stood at almost 3,000.

The Government budget Allocations for R&D (GBARD) for 2025 amounted to €42.3 million, a decrease of €0.3 million when compared to 2024.

But the Malta Fiscal Advisory Council had said that stronger efforts are needed to boost research and development. A National Audit Office report has also flagged the failure of successive governments to adequately invest in research and development in Malta.

A newly published National Audit Office report has once again exposed the serious and long-standing failure of successive governments to adequately invest in research and development in Malta, Momentum said Wednesday.