ENOne of the most important determinants of innovation of economy is generally considered the expenditure on research and development. Given the importance of research and development activities, the purpose of this article is to analyze the level and structure of financing R&D activities in Lithuania in comparison to other EU countries. The analysis reveals a very low level of investment in research and development. However, in the last years of the examined period there has been a trend for the growth of GERD and GERD/GDP indicators. The low level of funding is not the only problem of Lithuanian economy. Another issue is an unfavorable sectoral structure of these expenditures.