Research and development
12. Oct 2026
R&D expenditure amounted to 1.3% of GDP in 2025 — slightly higher than in 2024
Total expenditure on research and experimental development as a percentage of gross domestic product (GDP) is the main statistical indicator used to compare R&D activity across countries. The European Union aims to increase R&D expenditure to 3% of GDP by 2030.
In 2025, R&D expenditure in the Faroe Islands amounted to DKK 388 million, equivalent to 1.3% of GDP. This was 0.1 percentage points higher than in the previous year. GDP in the Faroe Islands was DKK 29.5 billion in 2025, an increase of 5.6%. To reach 3% of GDP in 2025, total R&D expenditure would have needed to amount to DKK 885 million, or approximately DKK 500 million more.
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R&D expenditure in the Faroe Islands lowest in the Nordic region
The Faroe Islands is the first Nordic country to publish final R&D statistics for 2025. Sweden has published preliminary figures showing that R&D expenditure amounted to 3.5% of GDP in 2025. From 2022 to 2024, R&D expenditure as a share of GDP was lower in the Faroe Islands than in any other Nordic country.
R&D expenditure as a share of GDP in the Faroe Islands, the other Nordic countries and the EU is shown below for 2022, 2023, 2024 and 2025.
Public institutions focus on basic research — businesses focus on experimental development
Government and higher education institutions primarily carry out basic research. In 2025, basic research accounted for 55% of their R&D expenditure, while experimental development accounted for just 12%. In the business sector, experimental development accounted for 66% of R&D expenditure, while basic research accounted for just 10%.
Basic research primarily aims to acquire new knowledge about the underlying foundations of phenomena and observable facts, without any particular application in mind.
Applied research involves original investigations aimed at acquiring knowledge for a specific purpose or objective.
Experimental development involves systematic work that draws on knowledge gained from research and practical experience to produce new products and processes or improve existing products and processes.
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Faroese research focuses on natural sciences, marine aquaculture, fisheries, agriculture and veterinary sciences
Together, natural sciences and marine aquaculture, fisheries, agriculture and veterinary sciences account for 81% of total R&D expenditure in the Faroe Islands.
Only 19% of expenditure is in engineering and technology, medical and health sciences, social sciences, or humanities and the arts.
Research in the business sector is concentrated in marine aquaculture, fisheries, agriculture and veterinary sciences. Government institutions primarily conduct research in natural sciences, while research at higher education institutions is distributed more evenly across most fields.
Research and development covers various fields, which are grouped into six categories for statistical purposes using the OECD classification: natural sciences; marine aquaculture, fisheries, agriculture and veterinary sciences; engineering and technology; medical and health sciences; social sciences; and humanities and the arts.
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The primary sector record the largest increase
Institutions and businesses in the primary sector spent DKK 210 million on R&D in 2025. This was an increase of DKK 92 million, or 78%.
By comparison, R&D expenditure by institutions and businesses in the tertiary sector fell by DKK 40 million, a decrease of 20% compared with 2024.
The primary sector include fishing, aquaculture and other resource-based activities, while the secondary sector includes food, beverage and tobacco manufacturing, other manufacturing, energy and water supply, and construction.
The tertiary sector includes retail and wholesale trade, accommodation and food services, transportation and storage, information and communication, banking and insurance, real estate activities, leasing and rental services, public administration and related activities, education, health and social work, and other services.
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Businesses account for the largest R&D expenditure
R&D expenditure by private businesses in the Faroe Islands increased by 28%, or DKK 57 million, compared with the previous year. The increase was mainly in current expenditure. Total R&D expenditure by government and higher education institutions decreased by 4%.
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Fewer people working in R&D
R&D personnel totalled 242 full-time equivalents (FTEs) in 2025, a decrease of 19 FTEs compared to 2024. Men accounted for 61% and women for 39%. Men held 84% of technical positions, while researchers were split approximately equally between women and men.
One full-time equivalent represents the work performed by one full-time employee over one year.
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Definitions
Research and development
Research and experimental development encompasses creative and systematic work undertaken to expand the frontiers of knowledge and develop new applications for existing knowledge.
All five main criteria below must be met for an activity to be considered research and experimental development:
- Novel: must aim to create new knowledge.
- Creative: must be based on new concepts, proposals or scientific hypotheses. Regular procedures such as updates and software maintenance are thus not regarded as R&D activities.
- Uncertain: at the start of an R&D project, outcomes and costs cannot be precisely determined beforehand.
- Systematic: R&D is conducted in a planned way, with records kept of both the process followed and the outcome. The purpose and the sources of funding for the R&D performed must be identified.
- Reproducible: an R&D project must be thoroughly documented to facilitate both internal and external use. This allows other researchers to reproduce the results and build upon them in their own R&D work.
GERD is the gross domestic expenditure on R&D. GERD – particluarly GERD as a percentage of GDP – is the main indicator for international comparisons of R&D.
GERD covers the total domestic expenditures on research and development incurred during a specific period, i.e. all expenditures on R&D conducted in the four main sectors, including work involving funding from abroad. However, GERD does not cover R&D conducted abroad, even though this work may be carried out by Faroese researchers or with Faroese funding.
Only R&D conducted intramurally, i.e. within the same unit, is counted towards GERD. Funding for extramural R&D is not included. This is done to avoid double counting.
% of GDP
Expenditures on R&D as a percentage of GDP in current prices.
GDP is a measure of the total value of all final goods and services produced in a country during a specific period. These goods and services are the result of the combined efforts of various factors, including materials, labour and production tools.
GDP in current prices means that the GDP is measured using the prices that are in effect during the year measured.