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Endogenous growth model stresses the role of education for sustained growth. Lucas presents human capital for explaining unlimited growth by increasing the efficiency of education. Jones also gives similar model incorporating human capital. So-called Lisbon Agenda set by EU features the growth gap between EU and the U.S. The first look at the European case reveals the deficit in tertiary education investment. We examine simple model and derive important implications. Some data exist on the relationship between research and development (R&D) and input to education (years to schooling, expenditures). R&D is presumably a very important input to the production function for knowledge. We can also see plots of R&D intensities showing increasing trends in the five most highly developed countries (G-5 countries) from the 1960s to 2005
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