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Chapter 4. R&D: National Trends and International Comparisons


Research and development activities are an important input to commercial innovation and the objectives of government agencies. R&D is part of a class of intangible inputs that also include software, higher education, and worker training. Intangibles are at least as important sources of long-term economic growth as are physical investments in machinery, equipment, and other infrastructure (Corrado et al. 2006; Jorgenson 2007; Van Ark and Hulten 2007). Indeed, the America COMPETES Act[1] specifically recognizes the role of innovation, STEM education, entrepreneurship, and technology transfer based on federally performed or funded R&D in strengthening U.S. competitiveness.

This chapter focuses on R&D, presenting data on public and private funding and performance in the United States. It also examines related international investments or transactions involving R&D financing or performance.

Chapter Organization

This chapter is organized into eight main sections. A section on trends in national R&D performance is followed by four sections on the business sector. Business R&D, the second section, covers domestic R&D in detail. The third section covers foreign operations of U.S.-owned companies. The fourth section examines R&D by U.S. multinational companies (MNCs) and foreign-owned MNCs with U.S. activities, and the fifth describes international transactions in R&D services.

The sixth section presents patterns of federal government R&D, including mission areas such as defense, energy, and health, and concludes with federal tax incentives for business R&D. This is followed by a section on selected federal programs to aid small businesses and activities in technology transfer and commercialization.

The eighth and last section discusses international comparisons of R&D, including national R&D expenditures by performer and source (including universities), national R&D intensities, and government R&D priorities across member countries of the Organisation for Economic Cooperation and Development (OECD). The chapter also includes two appendix tables (appendix tables 4-1 and 4-2) that contain information on how R&D comparisons across time and among different countries can be made.


[1] America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science [COMPETES] Act (Public Law 110-69, January 4, 2007) and America COMPETES Reauthorization Act of 2010 (Public Law 111-358, January 4, 2011).